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bge-retrieval-data-ivf-query-pruning-fixed-200K

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query_id stringlengths 32 32	query stringlengths 5 4.91k	positive_passages listlengths 1 22	negative_passages listlengths 9 100	subset stringclasses 7 values
4e9ef8e80a39360bf738dbe0d111e081	Settling house with husband during divorce. Which of these two options makes the most sense?	[ { "docid": "3b7e286509b8e3deab7cbf57c9657933", "text": "Both are close, but two notes - amiable or not, I'd rather have a deal that ends now, and nothing is hanging over my head to get or pay money on a future sale. 401(k) money is usually pre-tax, so releasing me from $10K of home equity is of more value than the $10K in a 401(k) that would net me $7K or so. As I commented to Joe, I'd focus on valuation. If your house is similar to those in the neighborhood, you might easily value it. If unique, the valuation may be tough. I'd spend a bit on an appraiser or two.", "title": "" }, { "docid": "302ff94541610d094a190bec9d6a88c4", "text": "Both seem to be reasonable. To decide you need to guess if the value of the house will go up or down between now and when you sell. If you think the value will go up - reach a calculation agreement now. If you think the value will go down - wait until the house is actually sold. So ya pays yer money, and ya takes yer chances... I think I understand the two scenarios Unless you are absolutely confident that you understand both scenarios - make sure your lawyer gets involved and explains them to you until you do understand.", "title": "" }, { "docid": "012a9f77a5a2d97bf5f1a814a166c0dc", "text": "How about a third approach: Figure the buyout as above. Figure what percentage of the value of the house the buyout constitutes. When the house sells the other party gets that percentage of the sales price.", "title": "" } ]	[ { "docid": "a1ebbc5a056464b41ab9e59830944367", "text": "\"You are \"\"pool[ing] the sales from both houses as downpayment on the new house.\"\" But they are going to pay you rent. Your question as it stands, just opens more questions. What, exactly is the ownership of the new house? If your's (and your wife's) was the money a gift? Ignoring the gift, if that's what it is, and if the in-law suite is 25% of the house value, you have a rental. You claim 25% of the expenses, including property tax and mortgage interest, along with 25% of the utilities, unless their part has its own meters. That's a start, if you add details, I may edit my answer. (Not to be pedantic, but whose parents are they. They can't be \"\"our in-laws,\"\" can they?)\"", "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": "da1eab3f51253af88bd0bb0f14b9257c", "text": "There are many other good answers here, but I just wanted to note that it could be dangerous to rely on the changes in alimony and child support that you've mentioned. You have no way of predicting if your ex will lose her job or take the kids back more of the time. If you already have a house and mortgage and all of a sudden alimony and child support go up again, you could be in big trouble. Congrats on everything getting better, it sounds like you're dealing well with a crappy situation. Good luck!", "title": "" }, { "docid": "5a40eee5445e687b0de14606db987a66", "text": "Well, it sounds like you have two options: 1) Continue to jointly own the house. 2) Compensate her for her equity and get the title transferred. I hate to tell you this, but she is entitled to half of the equity regardless of how much she paid into it. That said, she is still on the hook equally for the loan amount, but it won't do you any good if she is not willing to pay. Also, option 2 probably isn't a good deal for your co-signer as she would still be liable for the entire loan loan (just as you are) regardless of the title.", "title": "" }, { "docid": "1e1a0d7d396eb26d24b09d1bad7690a2", "text": "I cannot emphasize enough how important it is, when you buy a house with someone you are not married to, to make a legal agreement on how the money should be divided when you sell. I know it's too late for you, but I write this for anyone else reading this answer. From a legal point of view, if you made no agreement otherwise, you each own 50% of the house. If you want to divide it any other way, you will have to agree what an appropriate division is. Dividing according to the amount each of you paid towards it is a good way. Decide for yourselves if that means just mortgage payments, or also taxes, repairs, utilities etc. You should also be aware that if you have been living together a long time, like more than a year, some jurisdictions will allow one party to sue the other as if they were getting divorced. Then the courts would be involved in the division of property.", "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": "0bd390b162602650837587935d7d2400", "text": "\"In the short term what does it matter if she has poor credit? Just let it ride and focus on the important things. In the long term the most important part is \"\"completing the divorce\"\". That is separating all parts of her financial life from her ex-husband. This might mean she takes possession of the house and has him off the loan, or she gets off the loan and this may mean forcing a sale. If there are children or alimony involved she needs to build her income to the point that paying child support or alimony does not impact her budget. If she is on the receiving end, then she should budget so those items are bonus money and not counted on. She is flat broke and does not need to worry about borrowing money at this juncture. In this case a low credit score is a blessing.\"", "title": "" }, { "docid": "7cf5c99fe0c5d5951803ae8a0299a763", "text": "The days are long gone when offered mortgages were simply based on salary multiples. These days it's all about affordability, taking into account all incomes and all outgoings. Different lenders will have different rules about what they do and don't accept as incomes; these rules may even vary per-product within the same lender's product list. So for example a mortgage specifically offered as buy-to-let might accept rental income (with a suitable void-period multiplier) into consideration, but an owner-occupier mortgage product might not. Similarly, business rules will vary about acceptance of regular overtime, bonuses, and so on. Guessing at specific answers: #1 maybe, if it's a buy-to-let product, Note that these generally carry a higher interest rate than owner-occupier mortgages; expect about 2% more #2 in my opinion it's extremely unlikely that any lender would consider rental income from your cohabiting spouse #3 probably yes, if it's a buy-to-let product", "title": "" }, { "docid": "666d4e69434731a9ded729f1abad59a5", "text": "\"I encourage you to think of this home purchase decision as a chance to buy into a community that you want your children to grow up in. Try to find a place where you will be happy for the next 20 years, not just the next 2 or 7 years. In your situation, option 1 seems like a bad idea. It will create an obstacle to having children, instead of establishing a place for them to grow up in. Option 2 is close to \"\"buying a house on a layaway plan\"\". It offers the most financial flexibility. It also could result in the best long-term outcome, because you will buy in an established area, and you will know exactly what quality house you will have. But you and your fiancé need to ask yourselves some hard questions: Are you willing to put up with the mess and hassles of remodelling? Are you good at designing such projects? Can you afford to pay for the projects as they occur? Or if you need to finance them, can you get a HELOC to cover them? Especially if you and your fiancé do much of the work yourselves, break down the projects into small enough pieces that you can quickly finish off whatever you are working on at the time, and be happy living in the resulting space. You do not want to be nagging your husband about an unfinished project \"\"forever\"\" -- or silently resenting that a project never got wrapped up. I posted some suggestions for incrementally finishing a basement on the Home Improvement Stack Exchange. If you are up to the job of option 2, it is less risky than option 3. Option 3 has several risks: You don't know what sort of people will live in the neighborhood 5 - 20 years from now. Will the homes be owner-occupied? Or rentals? Will your neighbors care about raising children well? Or will lots of kids grow up in broken homes? Will the schools be good? Disappointing? Or dangerous? Whereas in an established neighborhood, you can see what the neighborhood is currently like, and how it has been changing. Unless you custom-build (or remodel), you don't control the quality of the construction. Some neighborhoods built by Pulte in the last 10 years were riddled with construction defects. You will be paying up-front for features you don't need yet. You might never need some of them. And some of them might interfere with what you realize later on might be better. In stable markets, new homes (especially ones with lots of \"\"upgrades\"\") often decline in value during the first few years. This is because part of the value is in the \"\"newness\"\" and being \"\"up-to-date\"\" with the latest fads. This part of the value wears off over time. Are the homes \"\"at the edge of town\"\" already within reasonable walking distance of parks, schools, church, grocery stores, et cetera? Might the commute from the \"\"edge of town\"\" to work get worse over the next 5 - 20 years?\"", "title": "" }, { "docid": "c7c01e532e699f91dbf3b441b7b6a50c", "text": "It may clarify your thinking if you look at this as two transactions: I am an Australian so I cannot comment on US tax laws but this is how the Australian Tax Office would view the transaction. By thinking this way you can allocate the risks correctly, Partnership Tenancy Two things should be clear - you will need a good accountant and a good lawyer. I do not agree that there is a conflict of interest in the lawyer acting for both parties - his role should only be for advice and to document what the two of you agree to. If you end up in dispute, then you need two lawyers.", "title": "" }, { "docid": "af7968d88cdb674c6d329e2c9e570280", "text": "this seems like a bad idea. Example: You want to sell. He doesn't. But he doesn't have enough money to buy you out. What will you do? You might want to sell because you need money, you have to move, you want to get married, you want to start a new business, etc. You two are not equals (you need a place to live), so this is unlikely to work.", "title": "" }, { "docid": "a4eda79a77fa08f774a90853443ff469", "text": "I'm glad that you feel like being fair and equitable to your party. Other answerers are, of course, correct that being fair and equitable to your girlfriend is not in your best interests but that's not what you're trying to do here and I commend you for it. There is nothing that stops you drawing up a simple legal contract giving your girlfriend a share of the value of your house in return for her payments. Just get it signed and witnessed and checked over by a legal representative. You can include reasonable terms for the money to be paid back if you separate - perhaps when you sell the property or within two years of the breakup - that don't put you in immediate danger of losing the property. Just make clear that this contract is between you and her for a sum of money linked to the value of your house; it does not establish any legal claim on your house itself. A reasonable level for her to claim the property would be one half of the change in equity between when you start joint paying and when you separate - should that happen.", "title": "" }, { "docid": "7da7f4bfd86810b55a4c938eb892ef0a", "text": "As pointed out in a comment, it would be more natural to get a regular mortgage on the second house, which is essentially using the second house as collateral for its own loan. If you are to use the first house, either mortgage it or get a home equity line of credit on it and use that money to buy the second house. The relative merits of the options may depend in part on where you live, whether or not you live in the homes, and the relative cost of the two properties. For example, in the US, first and second homes get preferred tax treatment in addition to rates that are typically better than commercial loans (including mortgages for investment properties). If you're going to get a better rate and pay less taxes on one option and not on the others, that's definitely something to weigh.", "title": "" }, { "docid": "464c9b92963363ecd1df7012855d3cf6", "text": "If the homeowner knows the situation is hopeless, and the end result will be the loss of the home, jumping to the end result can be helpful. It is quicker, they don't spend as much time fighting a losing battle. Deed in Lieu of foreclosure is not so great for the borrower if the bank goes after them for the rest of the money owed. There can also be tax implications if the debt is forgiven. Though these issues also exist when the drawn out foreclosure option is done. For the bank. The longer the process the more the house deteriorates. The borrower may stop maintenance and may even vandalize the house. Getting their lock on the door quickly is important to them. They protect it, clean it, and prep it for sale right away. They also save on lawyer fees. They know that the moment they start the foreclosure process all money from the borrower stops, this can save thousands in carrying costs. One issue will be how the accounting losses will be divided among the servicing company, and the investors. If the servicing company will make more money from the longer process they may not push for the quick settlement. If the opposite is true, they will be quickly on board. For the new buyer, the issue with either foreclosure is that the longer process can result in greater hidden and visible damage. The heat pump may work, but the disgruntled homeowner stopped changing the filters the last six months. They may have also removed and damaged things on the way out. Other than that I don't see a big difference. Because the bank had lower costs involved in the foreclosure they might settle for a lower purchase price, but that might be hard to know.", "title": "" }, { "docid": "c79f69255b4e48d9fb7c0bd8fbbedcbe", "text": "\"I'm going to assume that by \"\"register the house in my name\"\" you mean that the house is legally yours. In that case there are a number of implications, tax and otherwise. You should also be very clear with your father about what happens when the house is sold. Do you give him back what he paid for it? Does he get all the value? What happens if the value has gone down? Some of this is down to Indian law, which I know nothing about. However all of these are red flags which you should consider before doing this. This is not legal advice in any jurisdiction.\"", "title": "" } ]	fiqa
acc18c2b6750d5b2b36e3c1b1715fd3e	Calculating the value of an investors inventory	[ { "docid": "1cc4b08bb104d39397a5e68f8d951d9f", "text": "Is it just -344.58= -$155.72 for CCC and -110.41= -$4.51 for DDD? Yes it needs to be recorded as negative because at some point in time, the investor will have to spend money to buy these shares [cover the short sell and return the borrowed shares]. Whether the investor made profit or loss will not be reflected as you are only reflecting the current share inventory.", "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): (70-1Vc)(e^(0.055(12/12))) = (75.38-115.38) => (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^(rt)-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 = [(0.86260710715.38)+(0.1373928935)]/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": "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": "2062d8a92e3151241257c925fd0c2a15", "text": "One way that is common is to show the value over time of an initial investment, say $10,000. The advantage of this is that it doesn't show stock price at all, so handles splits well. It can also take into account dividend reinvestment. Fidelity uses this for their mutual funds, as can be seen here. Another option would be to compute the stock price as if the split didn't happen. So if a stock does a 2:1 split, you show double the actual price starting at that point.", "title": "" }, { "docid": "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": "8a6e87ece5bda5dbb3720b8f90837b88", "text": "\"Here is how I would approach that problem: 1) Find the average ratios of the competitors: 2) Find the earnings and book value per share of Hawaiian 3) Multiply the EPB and BVPS by the average ratios. Note that you get two very different numbers. This illustrates why pricing from ratios is inexact. How you use those answers to estimate a \"\"price\"\" is up to you. You can take the higher of the two, the average, the P/E result since you have more data points, or whatever other method you feel you can justify. There is no \"\"right\"\" answer since no one can accurately predict the future price of any stock.\"", "title": "" }, { "docid": "cf8488ef41130233fcc63a7b933a6fdf", "text": "So, the price-earnings ratio is price over earnings, easy enough. But obviously earnings are not static. In the case of a growing company, the earnings will be higher in the future. There will be extra earnings, above and beyond what the stock has right now. You should consider the future earnings in your estimate of what the company is worth now. One snag: Those extra earnings are future money. Future-money is an interesting thing, it's actually worth less than present-money- because of things like inflation, but also opportunity cost. So if you bought $100 in money that you'll have 20 years from now, you'd expect to pay less than $100. (The US government can sell you that money. It's called a Series EE Savings Bond and it would cost you $50. I think. Don't quote me on that, though, ask the Treasury.) So you can't compare future money with present-money directly, and you can't just add those dollars to the earnings . You need to compute a discount. That's what discounted cash-flow analysis is about: figuring out the future cash flow, and then discounting the future figuring out what it's worth now. The actual way you use the discount rate in your formula is a little scarier than simple division, though, because it involves discounting each year's earnings (in this case, someone has asserted a discount of 11% a year, and five years of earnings growth of 10%). Wikipedia gives us the formula for the value of the future cash flow: essentially adding all the future cash flows together, and then discounting them by a (compounded) rate. Please forgive me for not filling this formula out; I'm here for theory, not math. :)", "title": "" }, { "docid": "4e30ca5efd5d21101a2e6d781d8bcf48", "text": "Some personal finance packages can track basis cost of individual purchase lots or fractions thereof. I believe Quicken does, for example. And the mutual funds I'm invested in tell me this when I redeem shares. I can't vouch for who/what would make this visible at times other than sale; I've never had that need. For that matter I'm not sure what value the info would have unless you're going to try to explicitly sell specific lots rather than doing FIFO or Average accounting.", "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": "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": "a1f8e1e935ad365e016e2e6468cf4797", "text": "Adding assets (equity) and liabilities (debt) never gives you anything useful. The value of a company is its assets (including equity) minus its liabilities (including debt). However this is a purely theoretical calculation. In the real world things are much more complicated, and this isn't going to give you a good idea of much a company's shares are worth in the real world", "title": "" }, { "docid": "983e84eb31d74702554938415b8ccc43", "text": "One approach would be to create Journal Entries that debit asset accounts that are associated with these items and credit an Open Balance Equity account. The value of these contributions would have to be worked out with an accountant, as it depends on the lesser of the adjusted basis vs. the fair market value, as you then depreciate the amounts over time to take the depreciation as a business expense, and it adjusts your basis in the company (to calculate capital gains/losses when you sell). If there were multiple partners, or your accountant wants it this way, you could then debit open balance equity and credit the owner's contribution to a capital account in your name that represents your basis when you sell. From a pure accounting perspective, if the Open Balance Equity account would zero out, you could just skip it and directly credit the capital accounts, but I prefer the Open Balance Equity as it helps know the percentages of initial equity which may influence partner ownership percentages and identify anyone who needs to contribute more to the partnership.", "title": "" }, { "docid": "7ca594024cad43676e532bdd3be3a86d", "text": "No, it's not all long-term capital gain. Depending on the facts of your situation, it will be either ordinary income or partially short-term capital gain. You should consider consulting a tax lawyer if you have this issue. This is sort of a weird little corner of the tax law. IRC §§1221-1223 don't go into it, nor do the attendant Regs. It also somewhat stumped the people on TaxAlmanac years ago (they mostly punted and just declared it self-employment income, avoiding the holding period issue). But I did manage to find it in BNA Portfolio 562, buried in there. That cited to a court case Comm'r v. Williams, 256 F.2d 152 (5th Cir. 1958) and to Revenue Ruling 75-524 (and to another Rev. Rul.). Rev Rul 75-524 cites Fred Draper, 32 T.C. 545 (1959) for the proposition that assets are acquired progressively as they are built. Note also that land and improvements on it are treated as separate assets for purposes of depreciation (Pub 946). So between Williams (which says something similar but about the shipbuilding industry) and 75-524, as well as some related rulings and cases, you may be looking at an analysis of how long your property has been built and how built it was. You may be able to apportion some of the building as long-term and some as short-term. Whether the apportionment should be as to cost expended before 1 year or value created before 1 year is explicitly left open in Williams. It may be simpler to account for costs, since you'll have expenditure records with dates. However, if this is properly ordinary income because this is really business inventory and not merely investment property, then you have fully ordinary income and holding period is irrelevant. Your quick turnaround sale tends to suggest this may have been done as a business, not as an investment. A proper advisor with access to these materials could help you formulate a tax strategy and return position. This may be complex and law-driven enough that you'd need a tax lawyer rather than a CPA or preparer. They can sort through the precedent and if you have the money may even provide a formal tax opinion. Experienced real estate lawyers may be able to help, if you screen them appropriately (i.e. those who help prepare real estate tax returns or otherwise have strong tax crossover knowledge).", "title": "" }, { "docid": "3a43fd02236810d0cff0fa9231398b1d", "text": "Let's suppose your friend gave your $100 and you invested all of it (plus your own money, $500) into one stock. Therefore, the total investment becomes $100 + $500 = $600. After few months, when you want to sell the stock or give back the money to your friend, check the percentage of profit/loss. So, let's assume you get 10% return on total investment of $600. Now, you have two choices. Either you exit the stock entirely, OR you just sell his portion. If you want to exit, sell everything and go home with $600 + 10% of 600 = $660. Out of $660, give you friend his initial capital + 10% of initial capital. Therefore, your friend will get $100 + 10% of $100 = $110. If you choose the later, to sell his portion, then you'll need to work everything opposite. Take his initial capital and add 10% of initial capital to it; which is $100 + 10% of $100 = $110. Sell the stocks that would be worth equivalent to that money and that's it. Similarly, you can apply the same logic if you broke his $100 into parts. Do the maths.", "title": "" }, { "docid": "bf0540111a2051185227f72005547c32", "text": "\"Generally if you are using FIFO (first in, first out) accounting, you will need to match the transactions based on the number of shares. In your example, at the beginning of day 6, you had two lots of shares, 100 @ 50 and 10 @ 52. On that day you sold 50 shares, and using FIFO, you sold 50 shares of the first lot. This leaves you with 50 @ 50 and 10 @ 52, and a taxable capital gain on the 50 shares you sold. Note that commissions incurred buying the shares increase your basis, and commissions incurred selling the shares decrease your proceeds. So if you spent $10 per trade, your basis on the 100 @ 50 lot was $5010, and the proceeds on your 50 @ 60 sale were $2990. In this example you sold half of the lot, so your basis for the sale was half of $5010 or $2505, so your capital gain is $2990 - 2505 = $485. The sales you describe are also \"\"wash sales\"\", in that you sold stock and bought back an equivalent stock within 30 days. Generally this is only relevant if one of the sales was at a loss but you will need to account for this in your code. You can look up the definition of wash sale, it starts to get complex. If you are writing code to handle this in any generic situation you will also have to handle stock splits, spin-offs, mergers, etc. which change the number of shares you own and their cost basis. I have implemented this myself and I have written about 25-30 custom routines, one for each kind of transaction that I've encountered. The structure of these deals is limited only by the imagination of investment bankers so I think it is impossible to write a single generic algorithm that handles them all, instead I have a framework that I update each quarter as new transactions occur.\"", "title": "" }, { "docid": "22dcd0ba9de89e97f557a7a9a927f198", "text": "Thanks for this, great in depth answer. I had previously calculated a WACC and have used it for my discount rate. As part of your last point on revenue vs. cash, I've set a accounts receivable period of 30 days, and then applied a factor of 30/365 revenue to understand what portion of my revenue is not cash in hand. Does that make sense?", "title": "" } ]	fiqa
6d945bce4ca357b30177d8b4b2bb5ed5	What is a straddle?	[ { "docid": "408604a92de5c1ef2ea8333597a02c7b", "text": "\"A straddle is an options strategy in which one \"\"buys\"\" or \"\"sells\"\" options of the same maturity (expiry date) that allow the \"\"buyer\"\" or \"\"seller\"\" to profit based on how much the price of the underlying security moves, regardless of the direction of price movement. IE: A long straddle would be: You buy a call and a put at the same strike price and the same expiration date. Your profit would be if the underlying asset(the stock) moves far enough down or up(higher then the premiums you paid for the put + call options) (In case, one waits till expiry) Profit = Expiry Level - Strike Price - (Premium Paid for Bought Options) Straddle\"", "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": "5255d150c1443af666c5c63f8400a873", "text": "Long Straddle: \\\\/ Assuming you're trying to straddle the spot price, it will be more expensive to set up than a strangle as options strikes near the spot are more costly. Any price movement will regain against what was spent to acquire the options. Long Strangle: \\\\_/ Assuming you're trying to strangle the spot price, it will be less expensive to set up than a straddle as the options strikes are away from the spot. It will require a larger price movement than the straddle to begin to regain value against what you spent, as there is a dead zone between the strikes where both expire worthless. The / is the gain from a price movement up from the increase in value of calls; the \\\\ is the gain from a price movement down from the increase in value of puts.", "title": "" }, { "docid": "5f4196bb7ccd99befb88c4860b637223", "text": "The Thule Outride 561 is a aluminium frame, super light weight roof-top option to carry your bike or two. This lovely bike carrier is especially designed for sports bikes with carbon frames. The Thule Outride 561 sports quick release wheel straps for near instant loading and unloading of your bikes.Bikes can be locked to the carrier making them difficult to steal.", "title": "" }, { "docid": "99e624fff0e94350a2a86d1a88cc5782", "text": "\"Support and resistance points indicate price levels where there have been a large amount of trading activity, usually from institutions, that tend to stabilize the price of a stock. Support is a temporary FLOOR, where people have been buying in large quantities. That means there's a good chance that the stock won't go below this level in the near term. (But if it does, watch out.) Resistance is a temporary CEILING where people have been selling. When the stock price hits this level, people tend to sell, and push it back down. Until there are \"\"no more\"\" sellers at this level. Then the price could skyrocket if there is enough buying.\"", "title": "" }, { "docid": "9f9560e91a513fd2d65cc22ffd0ef481", "text": "G spread - you have a 5.5 year bond, you take your yield minus the yield on the 5.5y point (interpolated) of the benchmark sovereign curve. Think of G = Government. I Spread - same as G Spread but you use the relevant Swap Curve. E.g. USD bond, compare against the USD Swaps curve. I = interpolated. Z Spread - stands for zero volatility curve spread. You strip the swaps curve to get zero rates (i.e. Zero coupon rates for each tenor), then find the constant spread on top of each part of the curve's zero rates to arrive at your bond's yield. In G and I Spread, you're basically discounting the bond's cash flows using one rate (i.e. The interpolated yield on the curve). With Z Spread, you're discounting using the entire portion of the curve that's relevant to your bond's maturity.", "title": "" }, { "docid": "d16d0bf2b9e90273c4687c5fd11f194c", "text": "The mechanism is allowing insertion of 3 butyl rubber seals in the window between the frame and the opening sash. It has an external seal, mid window, and inner seal. Due to its constructional make-up many non-tilt turn manufacturers are limited to one or two seals.", "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": "9f7480c531b54617d48b4209eb223fc5", "text": "Depending on the structure of you're portfolio, it could be that your portfolio is delta neutral to take advantage of diminishing time value on options, short straddles/strangles would be an example.", "title": "" }, { "docid": "c11fd96f7cb96361369a66de5e534f63", "text": "The main reason is that you move from the linear payoff structure to a non-linear one. This is called convexity in finance. With options you can design a payoff structure in almost any way to want it to be. For example you can say that you only want the upside but not the downside, so you buy a call option. It is obvious that this comes at a price, the option premium. Or equivalently you buy the underlying and for risk management reasons buy a put option on top of it as an insurance. The price of the put could be seen as the insurance premium. You can of course combine options in more complicated ways so that you e.g. profit as long as the underlying moves strongly enough in either direction. This is called a straddle.", "title": "" }, { "docid": "02fa66cfa69d5558e602110f32d2b89a", "text": "Activist Investor is the entrenched capitalists fake news meme. Trump wants to pass a law that says shareholders don't even get a vote until they pass a certain threshold on ownership % of a company so they can keep all the little people from having any say. Ownership isn't really ownership unless you're rich I guess. Democracy bad! Freedom! America!", "title": "" }, { "docid": "cfd59d5453f7bac8980471a1619cf26d", "text": "Basic arbitrage is the (near-)simultaneous purchasing and selling of things that are convertible. The classic example is the international trading of equities. If someone in London wants to purchase a hundred shares of Shell for 40 GBP ea. and someone in New York wants to sell you a hundred shares of Shell for 61 USD ea., you can buy the shares from the guy in New York, sell them to the guy in London and convert your GBP back in to USD for a profit of $41.60 minus fees. Now, if after you buy the shares in New York, the price in London goes down, you'll be left holding 100 shares of Shell that you don't want. So instead you should borrow 100 shares in London and sell them at the exact same time that you buy the shares in New York, thus keeping your net position at 0. In fact, you should also borrow 4000GBP and convert them to USD at the same time, so that exchange rate changes don't get you.", "title": "" }, { "docid": "1f7978f03b234315a7862f5a9805f687", "text": "Honestly this sounds like a bug. In the early days of HFT, quote stuffing looked like this, but everyone created anti manipulation algos that do Fourier transforms to catch that kind of behavior. Modern manipulation is much cleverer than this. Source: I have designed anti manipulation algos for a HFT firm.", "title": "" }, { "docid": "f20d92bc6a775adc0c14cd28383bc89d", "text": "Bootstrap has been a verb for a very long time, and you've used it as such all your life, or at the very least it's short form: booting. It means, as you well know, to lift yourself up using your own resources.", "title": "" }, { "docid": "9cedcae6dfdecb867a27c9c8ef85f01c", "text": "We specialize in pedestrian traffic and crowd control stanchions and systems. We sell the best Stanchions (Stantions), Barriers, ADA Compliant Posts, Display Posts, Heavy Duty Utility Posts, Single and Dual Line Posts, Belts, Ropes, and other crowd control equipment. We strive to take online business to new levels of customer satisfaction, convenience and value for both the consumer and business.", "title": "" }, { "docid": "b6a62a2fce4ea7b69f9998722e5496b0", "text": "\"I think for this a picture is worth a thousand words. This is a \"\"depth chart\"\" that I pulled from google images, specifically because it doesn't name any security. On the left you have all of the \"\"bids\"\" to buy this security, on the right you have the \"\"asks\"\" to sell the security. In the middle you have the bid/ask spread, this is the space between the highest bid and the lowest ask. As you can see you are free to place you order to the market to buy for 232, and someone else is free to place their order to the market to sell for 234. When the bid and the ask match there's a transaction for the maximum number of available shares. Alternatively, someone can place a market order to buy or sell and they'll just take the current market price. Retail investors don't really get access to this kind of chart from their brokers because for the most part the information isn't terribly relevant at the retail level.\"", "title": "" }, { "docid": "2a860f472019b789c01be01acfce6145", "text": "If it wasn't true before I learned it than how was I taught it in the first place e where I would believe it? Do you know what gish galloping is? I'm perfectly open to other viewpoints but I'm not going to watch two long videos. Can you just make the points in these vids?", "title": "" } ]	fiqa
59d429c9bd39fad000cc1c34230df8ee	Highstreet bank fund, custom ETF or Nutmeg?	[ { "docid": "6733d9bb2f5cf453abc85a901eb8cb9f", "text": "It's a good question, I am amazed how few people ask this. To summarise: is it really worth paying substantial fees to arrange a generic investment though your high street bank? Almost certainly not. However, one caveat: You didn't mention what kind of fund(s) you want to invest in, or for how long. You also mention an “advice fee”. Are you actually getting financial advice – i.e. a personal recommendation relating to one or more specific investments, based on the investments' suitability for your circumstances – and are you content with the quality of that advice? If you are, it may be worth it. If they've advised you to choose this fund that has the potential to achieve your desired returns while matching the amount of risk you are willing to take, then the advice could be worth paying for. It entirely depends how much guidance you need. Or are you choosing your own fund anyway? It sounds to me like you have done some research on your own, you believe the building society adviser is “trying to sell” a fund and you aren't entirely convinced by their recommendation. If you are happy making your own investment decisions and are merely looking for a place to execute that trade, the deal you have described via your bank would almost certainly be poor value – and you're looking in the right places for an alternative. ~ ~ ~ On to the active-vs-passive fund debate: That AMC of 1.43% you mention would not be unreasonable for an actively managed fund that you strongly feel will outperform the market. However, you also mention ETFs (a passive type of fund) and believe that after charges they might offer at least as good net performance as many actively managed funds. Good point – although please note that many comparisons of this nature compare passives to all actively managed funds (the good and bad, including e.g. poorly managed life company funds). A better comparison would be to compare the fund managers you're considering vs. the benchmark – although obviously this is past performance and won't necessarily be repeated. At the crux of the matter is cost, of course. So if you're looking for low-cost funds, the cost of the platform is also significant. Therefore if you are comfortable going with a passive investment strategy, let's look at how much that might cost you on the platform you mentioned, Hargreaves Lansdown. Two of the most popular FTSE All-Share tracker funds among Hargreaves Lansdown clients are: (You'll notice they have slightly different performance btw. That's a funny thing with trackers. They all aim to track but have a slightly different way of trading to achieve it.) To hold either of these funds in a Hargreaves Lansdown account you'll also pay the 0.45% platform charge (this percentage tapers off for portolio values higher than £250,000 if you get that far). So in total to track the FTSE All Share with these funds through an HL account you would be paying: This gives you an indication of how much less you could pay to run a DIY portfolio based on passive funds. NB. Both the above are a 100% equities allocation with a large UK companies weighting, so won't suit a lower risk approach. You'll also end up invested indiscriminately in eg. mining, tobacco, oil companies, whoever's in the index – perhaps you'd prefer to be more selective. If you feel you need financial advice (with Nationwide) or portfolio management (with Nutmeg) you have to judge whether these services are worth the added charges. It sounds like you're not convinced! In which case, all the best with a low-cost passive funds strategy.", "title": "" }, { "docid": "cf470bd4321a593788bb0b83d84e07fd", "text": "And it's only as cheap as 1.78% if you stay with them 10 years! They'd love that. You can kind of tell they really want to lock you in for over 4 years. I also think it's daylight robbery, but as a self execution investor I tend to have to talk myself out of that belief by default to be fair. One can wonder too, why are there even 2 fixed (percentage wise) fees? They are desperate not to have one number that is too big sounding, either the advisor fee is a rip off because they have to do all the same analysis regardless, or you could take the view that it's the only valid fee as you're paying for a slice of something, where as the other fee is what? A share of the fixed costs? Well, isn't advising as essential as anything else? I actually think Nutmeg is OK, I've not used them or dealt with them in any way but they are, to a greater or lesser degree, what I've wished for to recommend to friends who don't want to DIY, which is a cheaper next generation online investment facility, and their fees drop significantly over 100K. Going by their claimed past performance and fee structure, whilst I'd like them to be cheaper, I personally think they are not a bad choice in the market.", "title": "" } ]	[ { "docid": "5cd9bf9eeeb4256ee79f6605e933f98c", "text": "\"I use TIAA-Cref for my 403(b) and Fidelity for my solo 401(k) and IRAs. I have previously used Vanguard and have also used other discount brokers for my IRA. All of these companies will charge you nothing for an IRA, so there's really no point in comparing cost in that respect. They are all the \"\"cheapest\"\" in this respect. Each one will allow you to purchase their mutual funds and those of their partners for free. They will charge you some kind of fee to invest in mutual funds of their competitors (like $35 or something). So the real question is this: which of these institutions offers the best mutual and index funds. While they are not the worst out there, you will find that TIAA-Cref are dominated by both Vanguard and Fidelity. The latter two offer far more and larger funds and their funds will always have lower expense ratios than their TIAA-Cref equivalent. If I could take my money out of TIAA-Cref and put it in Fidelity, I'd do so right now. BTW, you may or may not want to buy individual stocks or ETFs in your account. Vanguard will let you trade their ETFs for free, and they have lots. For other ETFs and stocks you will pay $7 or so (depends on your account size). Fidelity will give you free trades in the many iShares ETFs and charge you $5 for other trades. TIAA-Cref will not give you any free ETFs and will charge you $8 per trade. Each of these will give you investment advice for free, but that's about what it's worth as well. The quality of the advice will depend on who picks up the phone, not which institution you use. I would not make a decision based on this.\"", "title": "" }, { "docid": "322adf88e50cec540e2b289c981ad770", "text": "You can invest in a couple of Sharia-conform ETFs which are available in Germany and issued by Deutsche Bank (and other financial institutions). For instance, have a look at these ETFs: DB Sharia ETFs In addition, Kuveyt Turk Bank aims to become Germany's first Islamic bank offering Sharia conform investments (Reuters).", "title": "" }, { "docid": "cc24e47a60d165d352f7a2b8a84119ea", "text": "is There Anyway I can Avoid losing 6-10% per Trade. As My Current Investment House Has Charged & will Be taking 5% hit quarterly If Left Untouched Stop trading penny stocks. Take your investment elsewhere and put it in a low-fee index fund ETF. You'll probably get a better return on your money.", "title": "" }, { "docid": "94fd0ac68a72a65937095c6edeaedb74", "text": "Thanks very much. 12b1 is a form that explains how a fund uses that .25-1% fee, right? So that's part of the puzzle im getting at. I'm not necessarily trying to understand my net fees, but more who pays who and based off of what. For a quick example, betterment bought me a bunch of vanguard ETFs. That's cool. But vanguard underperformed vs their blackrock and ssga etfs. I get that vanguard has lower fees, but the return was less even taking those into account. I'm wondering, first what sort of kickback betterment got for buying those funds, inclusive of wholesale deals, education fees etc. I'm also wondering how this food chain goes up and down the sponsor, manager tree. I'm sure it's more than just splitting up that 1%", "title": "" }, { "docid": "adcbfc7ed50dda109ff508fe92da26ec", "text": "I'm honestly not well versed on healthcare ETFs. I have seen a few mentioned here and there on various threads around /r/investing and /r/wallstreetbets. My pro-Vanguard bias would lead me to looking most closely at VHT, but there seem to be [many other great looking picks](http://etfdb.com/type/sector/healthcare/) out there such as IBB, XLV, and IHI, among others. Right now I am generally concerned about valuations in technology and perhaps simply in general, but we'll see what happens. As I craft my goals for the near and long term, I would favor the defense industry ($ITA), technology (broad definition -- $VGT, $V, $AAPL, $BABA, various video games companies short term), healthcare (above), some specific international exposure (such as $EWGS), and boring stuff ($VOO, $VTI).", "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": "fbaf8f14b52cfeedf9a2bdeac8dc656c", "text": "They have ETFs for most of what you listed above. Except the deep-fried candy bars. You know that's just a distributed candy bar that is THEN fried right? They have a few religious ETFs as well as some socially responsible ones. There is no reason to make one based on a single person's preference though - ETFs make their money on fees. For that they need VOLUME. Move Volume = More Money Also, there are over 1,411 ETF's in the US as of 2014. That means there are a lot of options already. You could always create your own if you are a great salesperson though. Source", "title": "" }, { "docid": "0ca83c3e36e1885784afa32f64fee0ae", "text": "\"Save the effort. For personal finance purpose, just use the simple tools. For example, if you like P&G very much but you want to diversify with ETF, use: http://etfdb.com/stock/PG/ https://www.etfchannel.com/finder/?a=etfsholding&symbol=PG Pick a ETF with highest weighting. Replace \"\"PG\"\" in the link with other tickers.\"", "title": "" }, { "docid": "1b2dae65dd374866d9f3920425b49b6e", "text": "I'm not familiar with QQQ, but I'm guessing this is something like IShares Ftse 100 (see description here)", "title": "" }, { "docid": "746fadc47e6606d3a1730a15c59391f2", "text": "I just finished a high frequency trading project. Individuals can do it, but you need a lot of capital. You can get a managed server in Times Square for $1500/month, giving you access to 90% of the US exchanges that matter, their data farms are within 3 milliseconds of distance (latency). You can also get more servers in the same building as the exchanges, if you know where to look ;) thats all I can divulge good luck", "title": "" }, { "docid": "5a9de080444de75c710b8e60527623c7", "text": "\"I'm trying to understand how an ETF manager optimized it's own revenue. Here's an example that I'm trying to figure out. ETF firm has an agreement with GS for blocks of IBM. They have agreed on daily VWAP + 1% for execution price. Further, there is a commission schedule for 5 mils with GS. Come month end, ETF firm has to do a monthly rebalance. As such must buy 100,000 shares at IBM which goes for about $100 The commission for the trade is 100,000 * 5 mils = $500 in commission for that trade. I assume all of this is covered in the expense ratio. Such that if VWAP for the day was 100, then each share got executed to the ETF at 101 (VWAP+ %1) + .0005 (5 mils per share) = for a resultant 101.0005 cost basis The ETF then turns around and takes out (let's say) 1% as the expense ratio ($1.01005 per share) I think everything so far is pretty straight forward. Let me know if I missed something to this point. Now, this is what I'm trying to get my head around. ETF firm has a revenue sharing agreement as well as other \"\"relations\"\" with GS. One of which is 50% back on commissions as soft dollars. On top of that GS has a program where if you do a set amount of \"\"VWAP +\"\" trades you are eligible for their corporate well-being programs and other \"\"sponsorship\"\" of ETF's interests including helping to pay for marketing, rent, computers, etc. Does that happen? Do these disclosures exist somewhere?\"", "title": "" }, { "docid": "4b6b44831c59cf35dcdf3a81a0cb0e62", "text": "Where are you planning on buying this ETF? I'm guessing it's directly through Vanguard? If so, that's likely your first reason - the majority of brokerage accounts charge a commission per trade for ETFs (and equities) but not for mutual funds. Another reason is that people who work in the financial industry (brokerages, mutual fund companies, etc) have to request permission for every trade before placing an order. This applies to equities and ETFs but does not apply to mutual funds. It's common for a request to be denied (if the brokerage has inside information due to other business lines they'll block trading, if a mutual fund company is trading the same security they'll block trading, etc) without an explanation. This can happen for months. For these folks it's typically easier to use mutual funds. So, if someone can open an account with Vanguard and doesn't work in the financial industry then I agree with your premise. The Vanguard Admiral shares have a much lower expense, typically very close to their ETFs. Source: worked for a brokerage and mutual fund company", "title": "" }, { "docid": "d6153164b7170b645d40c4449f890c9b", "text": "I know of no way to answer your question without 'spamming' a particular investment. First off, if you are a USA citizen, max out your 401-K. Whatever your employer matches will be an immediate boost to your investment. Secondly, you want your our gains to be tax deferred. A 401-K is tax deferred as well as a traditional IRA. Thirdly, you probably want the safety of diversification. You achieve this by buying an ETF (or mutual fund) that then buys individual stocks. Now for the recommendation that may be called spamming by others : As REITs pass the tax liability on to you, and as an IRA is tax deferred, you can get stellar returns by buying a mREIT ETF. To get you started here are five: mREITs Lastly, avoid commissions by having your dividends automatically reinvested by using that feature at Scottrade. You will have to pay commissions on new purchases but your purchases from your dividend Reinvestment will be commission free. Edit: Taking my own advice I just entered orders to liquidate some positions so I would have the $ on hand to buy into MORL and get some of that sweet 29% dividend return.", "title": "" }, { "docid": "a7f7cafcede60bd36387d7995a2bf706", "text": "Bond MF/ETF comes in many flavour, one way to look at them is corporate, govt. (gilt/sovreign), money market (short term, overnight lending etc.), govt. backed bonds. The ETF/MFs that invest money in these are also different types. One way to evaluate an ETF/MF is to see where they invest your money. Corporate debts are by the highest coupon paying bonds, however, the chance of default is also greater, if you wish to invest in these, it is preferable to look at the ETF/MF's debt portfolio financial ratings (Moodies etc.). Govt. bonds are more stable and unless the govt. defaults (which happens more often than we would like to think), here also look for higher rating bonds portfolio that the fund/scheme carries. The govt. backed bonds are somewhat similar to sovreign bonds, however, these are issuesd by institutions which are backed by govt. (e.g. national railways, municipal bodies etc.), any fund/scheme that invests in these bonds could also be considered and similarly measured. The last are the short term money market related, which provides the least return but are very liquid. It is very difficult to answer how you should invest large sum on ETF/MFs that are bond oriented. However, from any investment perspective, it is better to spread your money. If I take your hypthetical case of 1M$, I would divide it into 100K$ pieces and invest in 10 different ETF/MF schemes of different flavour: Hope this helps.", "title": "" }, { "docid": "b50979677c09fcf89f32c9b7b1f9ee0c", "text": "Perfect competition would not be the outcome you want from this model, nor does it imply what you posit. It implies that there will be infinitely many firms, with free entry/exit, making zero profits. Bonds would then become a reason for exit if you had heterogeneous firms (but in perfect competition this is unlikely). In fact in equilibrium no would (probably) issue bonds. What it seems like you want is some sort of structured oligopoly, or a regulated cartel separated into regions. This might generate the bond market you have in mind, but it still does not take into account the relative risk of the bonds.", "title": "" } ]	fiqa
14d3e6aba8330c45867d517ba6d8f2f8	Is socialtrend.com or/and feelthetrend.com legitimate?	[ { "docid": "b0dd2c5b099ef80ccd1ab9f0bfdb2c02", "text": "\"It's called a \"\"Pyramid scheme\"\". Its illegal in almost every country of the Western world. You're not going to earn lifetime income, of course, and these things collapse pretty quickly. Most of the \"\"common folks\"\" don't return the investment, its the organizers who take the money. Sometimes they run, most times they end up in jail. The way these schemes work is that they pay the early \"\"investors\"\" from the fees paid by new \"\"investors\"\". As long as a steady stream of new people keep signing up and paying into it those who got in very early make money. The idea is based on the geometric procession of each new person signing up two or more people, and those people doing the same. Pretty quickly at that rate you need to sign up every human being on the planet to keep the new money flowing in to make it work, which obviously is not realistic. Ultimately a small % of the people (if they can stay out of jail) will make a big amount of money the vast majority of \"\"investors\"\" get stiffed.\"", "title": "" } ]	[ { "docid": "81a0892a695ba40344a68db23cb8c3a6", "text": "moneydashboard.com claims to be the UK's Mint but I have problem using it with my HSBC account right now. I have contacted their helpdesk.", "title": "" }, { "docid": "f0dd6c6a398e52f198f7407fbd66556a", "text": "No ulterior motives? You do seem to submit a lot of links to sites like io9, forbes, torrentfreak, theverge, etc. and submit the same article to multiple reddits. Your links to, for example, theverge also began at the same time that I began seeing them submitted by other users, so I have always been suspicious of your posts.", "title": "" }, { "docid": "418560ccfabd92b6f509f8e16d8243ea", "text": "Anyone who claims they can consistently beat the market and asks you to pay them to tell you how is a liar. This cannot be done, as the market adjusts itself. There's nothing they could possibly learn that analysts and institutional investors don't already know. They earn their money through the subscription fees, not through capital gains on their beat-the-market suggestions, that means that they don't have to rely on themselves to earn money, they only need you to rely on them. They have to provide proof because they cannot lie in advertisements, but if you read carefully, there are many small letters and disclaimers that basically remove any liability from them by saying that they don't take responsibility for anything and don't guarantee anything.", "title": "" }, { "docid": "403ee36ddc52aed7be3f9ff2502f494f", "text": "\"The link you originally included had an affiliate code included (now removed). It is likely that your \"\"friend\"\" suggested the site to you because there is something in it for your \"\"friend\"\" if you sign up with their link. Seek independent financial advice, not from somebody trying to earn a commission off you. Don't trust everything you read online – again, the advice may be biased. Many of the online \"\"reviews\"\" for Regal Assets look like excuses to post affiliate links. A handful of the highly-ranked (by Google Search) \"\"reviews\"\" about this company even obscure their links to this company using HTTP redirects. Whenever I see this practice in a \"\"review\"\" for a web site, I have to ask if it is to try and appear more independent by hiding the affiliation? Gold and other precious metal commodities can be part of a diversified portfolio, a small part with some value as a hedge, but IMHO it isn't prudent to put all your eggs in that basket. Look up the benefits of diversification. It isn't hard to find compelling evidence in favor of the practice. You should also look up the benefits of low-fee passively-managed index funds. A self-directed IRA with a reputable broker can give you access to a wide selection of low-fee funds, not just a single risky asset class.\"", "title": "" }, { "docid": "4fe3833568957e8bd3ce48520a3118ad", "text": "\"The link highlighting on that page is bonkers. Not sure I trust what nymag.com is saying about internet culture. Also: \"\"It’s tough to generate revenue when your most active user base is too young to have a steady income.\"\" Really?\"", "title": "" }, { "docid": "2955788fb17910e7407bd753cdac1a9b", "text": "Unfortunately that's the most recent full report on things I know of, it was published in December. The current stats can be found elsewhere online. Currently Instagram is surging and has been since March, it's now bigger than Twitter. Also I believe those stats in the report are based off people who use the network at least once a day. This would include Messenger. I'm a social media marketer and consultant. The irony is like you I primarily use Facebook as a way to talk to people, I do participate in some groups but other than that I actually have my news feed blocked. Twitter is a massive time suck to market on, and not my favorite so I just automated that. Instagram is currently my favorite social media site and I think many Millennials would agree with that. People are highly visual, so it makes sense Instagram is surging. That and there's a lot less drama and bullshit on Instagram in my experience.", "title": "" }, { "docid": "a55bba895997279718bc6a7a8b1739de", "text": "Like all other trading brokers in the industry, they both have been acknowledged with mixed reviews. Before signing up, it’s important to know whether they are running a legitimate operation or not. You can see BinaryOptionsTrading-Review.com, judgebinaryoptions.com etc. to inquiries about these sites. They conduct in-depth research to identify the legitimacy of each brokers present in the market. Hope it will help you in making the right decision.", "title": "" }, { "docid": "b8118a2a42ce71b5da832a00656bc4d6", "text": "The problem is, I don't understand, how such sites work. Is that scam or not? Some of my friends told me that they've actually received the revenue after they deposited a bit of money to similar sites, and I don't have any evidence not to trust them. Yes there are scam. Stay away. Quite likely people got real money back into Bank Account. Or more likely it shows that there is more [notional] money in the sites account. If such sites really 'work', then how and why? These sites work, because there are quite a few people who believe in free / easy money. The site could be classic pyramid / Ponzi scheme. They could also be involved in some kind of Money Laundering. Why would anyone trust them so much to give them money for absolutely no reason? Okay, I'm not so clever, but they can't make profit only because of stupid people, can they? The same way you did, at times just for fun to experiment. At times because they believe there is easy get rich way. There is a reward that works so that if you see 120 you start believing in it. If you try and withdraw, there will be quite a few obstacles; under the pretext of holding period, withdrawal fees etc... but mostly they will encourage you to keep depositing small amounts and see it grow. This of it this way; if one can make 20% day on day ... one does not need someone else's money. The power of compounding would mean very quickly $ 100 would become 88 BILLION in 120 days!", "title": "" }, { "docid": "6343c60b2edeee55ae8266631df9b69f", "text": "The truth? Most of the time that it was a crappy imitator of MAD, it was actually a mob front used to hide and launder money. Management didn't care one bit about the content so long as it was turned in on time and seemed reasonably professional so as not to arouse suspicion (I knew someone who did some freelance work for them back in the day). I suspect that is no longer the case.", "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": "3c2b25136c7ce01c7d777199d596d964", "text": "Urban spoon is a property of citysearch.com who changed their name to citygrid for whatever reason. The owner Barry diller who operates IAC also owns college humor, the former ask Jeeves and a bunch of other half ass media companies and is a Forbes 400 richest. His building, the iceberg building in nyc is impressive though. Regardless they also work with 'orange soda' a 'SEO' company that has become particularly useless after the Google panda update and they, like others, have been accused of click fraud. Nobody clicks ads, these companies need money from somewhere (or somebody)", "title": "" }, { "docid": "610be576c9dfa95335f9e1d0589cb5d7", "text": "Im always suspicious whenever an article uses 2 data points to suggest a trend. November 1997 and December 2016. Ok? What about all the years inbetween? '97 may have had an unusually high number due to the Dot Com boom when everyone and their brother were creating do-nothing websites and going public.", "title": "" }, { "docid": "6d31fd6f177f82e14d0a3c53b84ec20f", "text": "I like the aggregation a lot, but it seems like the site's purpose is designed for lead gen for those tools? Why are there not reviews or profiles of those tools on that site and instead just push their traffic to those platform's websites to download?", "title": "" }, { "docid": "a9a0c064da17cea4ce4bfaf232425dbb", "text": "Which I just think is a que for Google and Microsoft to start integrating your friends opinions on their status updates into your search experiences. If So and So didn't like this restaurant and left a bad note on Yelp! or another restaurant aggregator, well damnit you are not going to see that in your results. Your friends have spoken. The next best thing (Social) is going to be a bust for the average internet user.", "title": "" }, { "docid": "0f92f95634f730c11c7365855037926f", "text": "\"This is some bullshit \"\"news\"\" site. Registered to a Svilen Petrov. With \"\"authors\"\" from an unincorporated town in Mississippi and Arizona. You can assume this is not a legitimate source when they have sentences like this: >Earlier, Trump many time criticized Amazon\"", "title": "" } ]	fiqa
9cfd91876c77675ddbfb27e404be1e9a	How can the Samsung Upgrade Programme offer 0% APR?	[ { "docid": "6a43765af049c7be93a813e2b0dbe3c7", "text": "This is more a question about economics than about personal finance. The answer, though, is straight-forward. Samsung makes enough profit on the phones that they are willing to eat the costs of a 0% loan, with the attendant risk of non-payment and the loss due to inflation. By offering financing, they expect to sell more phones. So, it's a slight cost to Samsung, but one they can easily afford due to the markups and increased volume of sales.", "title": "" }, { "docid": "f6d71cdeec40b652c05700e87770fd38", "text": "\"The financing is built into the price. I do not have hard facts, but I strongly suspect that very few people buy brand-new smartphones at full price upfront. Most pay a monthly installment to the carrier or retailer equal to 1/24 of the full price, which in effect is \"\"0% financing for 2 years\"\". Samsung might be able to advertise a lower retail price and then offer financing at some rate of interest, but from a marketing standpoint, offering \"\"0%\"\" financing makes it feel like you're getting \"\"free money\"\", when in fact it's built into the overall price. Which sounds better, buying an $840 phone with 0% financing for two years or buying an $800 phone at 4.85% APR for two years (both have a $35 monthly payment)?\"", "title": "" }, { "docid": "e2a031809e310faa551f7998f5421f6b", "text": "Having just purchased an upcoming Samsung phone using their 0% interest I can tell you that the justification is to give you credit. I have the same with Best Buy which is 0% for a specific initial purchase. The bank (in the Samsung case is TD Bank) establishes a rotating credit line for you. The APR after is well established at the very high side of 29.99%. Nobody in their right mind should want to pay that much interest on any purchase. My last car purchase was below 3% APR. Additionally the introductory rate will still calculate their 29.99% interest as if it existed since the first day of credit and will be applied to your balance should you ever be late on any single payment. At that time the interest is factored in as if it were always there and payments are adjusted accordingly. You see, the bank wants you to pay their high interest rate. So they entice you with the 0% and hope you either finance more on that credit line (exempt from the promotional rate) or miss a payment and they can hit you with a whammy. Specifically the question asks how this offer benefits Samsung. To answer that portion; it ensures a sale at full retail price of the phone. Samsung is just an agent between you and the bank. The bank takes on the risk for a potential high reward.", "title": "" } ]	[ { "docid": "c253f40e797ebdded76b3a0e223b40f0", "text": "I would take a closer look at each provider. I have one credit-card provider who when there is a large portion of credit available, they frequently offer promotions on balance transfers so you fill that credit, sometimes it can be 0% for xx months, or a very low % until paid off in full. If this is the case clear that card fully and balance transfer the remainder to get an even lower interest to make the repayments eaier to clear.", "title": "" }, { "docid": "22338a43b9006dea9a3662a5d65947de", "text": "Nope. Or at least, if it were possible the company offering such a credit card would quickly go out of business. Credit card companies make money off of fees from the merchants the user is buying from and from the users themselves. If they charged no fees to the user on cash advances and, in fact, gave a 3% back on cash advances, then it would be possible for a user to: The company would lose money until they stopped the loophole or went out of business.", "title": "" }, { "docid": "a337ae670aead80607a370058e30dbb7", "text": "I think your understanding is correct as far as you describe, but you don't mention a critical detail to me. You also imply some penalty details for early withdrawal / cancellation but you don't state those terms in detail. Where and when is the interest paid? Does it go into the same CD for compounding? Does it get paid to another account? The description does say that it is priced at par, so we at least know that the interest doesn't have to be stuck unpaid within the CD until maturity, but it also means you don't necessarily get compounding at the CD rate. Without knowing where the interest goes, and if it's available for compounding, be careful in how you compare it to other CDs / savings accounts. A compoundable structure might be a better option, even at a lower APY.", "title": "" }, { "docid": "e138d48bd150ef9c9d160460027a7c44", "text": "Because your friend isn't going to like the ~2% charge they have to pay to the credit card company on the $10,000 purchase. Credit card companies make money off of transactions. The cardholder normally doesn't pay any transaction fees (and in fact can make a profit via rewards), but the merchant has to pay a certain amount of money to the credit card company for the transaction. In this case, the apartment owners ate the charge, likely because it was easier for them to send a check than to refund the cost of the fee through the credit card company. If you started doing this a lot to take advantage of this, I would imagine they would get smart and refuse your business (it'll be pretty obvious what you're doing if you're not signing any leases).", "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": "9360d30fe1116cbfbd238ffdb702853f", "text": "\"When you refinance, there is cost (guess: around $2000-$3000) to cover lawyers, paperwork, surveys, deed insurance, etc. etc. etc. Someone has to pay that cost, and in the end it will be you. Even if you get a \"\"no points no cost\"\" loan, the cost is going to be hidden in the interest rate. That's the way transactions with knowledgeable companies works: they do business because they benefit (profit) from it. The expectation is that what they need is different from what you need, so that each of you benefits. But, when it's a primarily cash transaction, you can't both end up with more money. So, unless value will be created somewhere else from the process (and don't include the +cash, because that ends up tacked onto the principle), this seems like paying for financial entertainment, and there are better ways to do that.\"", "title": "" }, { "docid": "186cbf2542e253e3663c6133f88a1bbb", "text": "There's a good explanation of this type of scam at the following link; It's known as a Spot-Delivery scam. https://www.carbuyingtips.com/top-10-scams/scam1.htm Also, I read this one a while back, and immediately this post reminded me of it: http://oppositelock.kinja.com/when-the-dealership-steals-back-the-car-they-just-sold-1636730607 Essentially, they claim you'll get one level of financing, let you take the car home, and then attempt to extort a higher financing APR out of you or request more money / higher payments. Check your purchasing agreement, it may have a note with something along the lines of 'Subject to financing approval' or something similar. If it does, you might be 'out of luck', as it were. Contact an attorney; in some cases (Such as the 'oppositelock.kinja.com' article above) consumers have been able to sue dealers for this as theft.", "title": "" }, { "docid": "2030d051b9a4283cf0200420312b9693", "text": "The bank depends on the laws of large numbers. They don't need to make money on every customer -- just on average. There are several ways that zero interest makes sense to them: You asked about banks, and I don't think you see this last scheme in use very much by a bank. Here's why. First, customers absolutely hate it - and when you drop the interest bomb, they will warn their friends away, blow you up on social media, call the TV news consumer protectors, and never, ever, ever do business with you again. Which defeats your efforts in customer acquisition. Second, it only works on that narrow range of people who default just a little bit, i.e. who have an auto-pay malfunction. If someone really defaults, not only will they not pay the punishment interest, they won't pay the principal either! This only makes sense for secured loans like furniture or cars, where you can repo that stuff - with unsecured loans, you don't really have any power to force them to pay, short of burning their credit. You can sue them, but you can't get blood from a stone.", "title": "" }, { "docid": "32dd739eac07fbd82c8dc3578df86f0b", "text": "\"I've run into two lines of thinking on cars when the 0% option is offered. One is that you should buy the car with cash - always. Car debt is not usually considered \"\"good debt,\"\" as there is no doubt but that your car will depreciate. Unless something very odd happens or you keep the car to antique status (and it's a good one), you won't make money off of it. On the other hand, with 0% interest - if you qualify, and remember that dealer promotions aren't for everyone, just those who qualify - you can invest that money in a savings account, bonds, a mutual fund, or the stock market and theoretically make a lot more over the 5 years while paying down the car. In that case, you really only need to make sure you save enough to make the payment low enough for your comfort zone. Personally I prefer to not be making a car payment. Your personal comfort level may vary. Also, in terms of getting your money's worth a gently used car in good condition is miles better than a new car. Someone else took the hit on the \"\"drive it off the lot\"\" decline in price for you.\"", "title": "" }, { "docid": "5af1dcf797340fb21e09e8aeffc86b22", "text": "it is possible that if you do not accept the offer, they will try offering you an even lower rate. if they offered you close to 0%, you could start carrying a balance and find a better use for the cash you would have spent paying it off. there are plenty of investments with a guaranteed return of over 0%. personally, i am using a 0% offer from one of my cards to invest in the stock market. i might lose that bet, but on average over the last 10 years, i have not. a pretty safe bet would be paying down your mortgage, or buying a cd that matures when the offer ends. that said, even a 10k$ balance might only pay you around 300$. is that worth the hassle to you?", "title": "" }, { "docid": "823a1d6f6f125c89b6106b7dd9d8f3c3", "text": "Someone did it for the Gen 1 volt. Although they don't sell the upgrade, the batteries are limited in how much they charge so they can cycle thousands of times would degradation, and some think that the engineers were too conservative, so they hacked it to change 20% or so more.", "title": "" }, { "docid": "7cfb64bbf0a388ad9bda6cea06cdc2ce", "text": "\"There's many concrete answers, but there's something circular about your question. The only thing I can think of is that phone service providers ask for credit report when you want to start a new account but I am sure that could be worked around if you just put down a cash deposit in some cases. So now the situation is flipped - you are relying on your phone company's credit! Who is to say they don't just walk away from their end of the deal now that you have paid in full? The amount of credit in this situation is conserved. You just have to eat the risk and rely on their credit, because you have no credit. It doesn't matter how much money you have - $10 or $10000 can be extorted out of you equally well if you must always pay for future goods up front. You also can't use that money month-by-month now, even in low-risk investments. Although, they will do exactly that and keep the interest. And I challenge your assumption that you will never default. You are not a seraphic being. You live on planet earth. Ever had to pay $125,000 for a chemo treatment because you got a rare form of cancer? Well, you won't be able to default on your phone plan and pay for your drug (or food, if you bankrupt yourself on the drug) because your money is already gone. I know you asked a simpler question but I can't write a good answer without pointing out that \"\"no default\"\" is a bad model, it's like doing math without a zero element. By the way, this is realistic. It applies to renting in, say, New York City. It's better to be a tenant with credit who can withhold rent in issue of neglected maintenance or gross unfair treatment, than a tenant who has already paid full rent and has left the landlord with little market incentive to do their part.\"", "title": "" }, { "docid": "7b000a97892cc975d572e05f9af9505f", "text": "This is very much possible and happens quite a lot. In the US, for example, promotional offers by credit card companies where you pay no interest on the balance for a certain period are a very common thing. The lender gains a new customer on such a loan, and usually earns money from the spending via the merchant fees (specifically for credit cards, at least). The pro is obviously free money. The con is that this is usually for a short period of time (longest I've seen was 15 months) after which if you're not careful, high interest rates will be charged. In some cases, interest will be charged retroactively for the whole period if you don't pay off the balance or miss the minimum payment due.", "title": "" }, { "docid": "12262c326568149698533a3c185be27c", "text": "If a shop offers 0% interest for purchase, someone is paying for it. e.g., If you buy a $X item at 0% interest for 12 months, you should be able to negotiate a lower cash price for that purchase. If the store is paying 3% to the lender, then techincally, you should be able to bring the price down by at least 2% to 3% if you pay cash upfront. I'm not sure how it works in other countries or other purchases, but I negotiated my car purchase for the dealer's low interest rate deal, and then re-negotiated with my preapproved loan. Saved a good chunk on that final price!", "title": "" }, { "docid": "43e4ed84fdb1f925cabfef36d8b03482", "text": "\"Whether or not the specific card in question is truly 0% interest rate for the first 12 months, such cards do exist. However, the bank does make money out of it on the average: Still, 12 months of not having to think about paying the bill. Nice. This is exactly what they want you to do. Then in 12 months, when you start thinking about it, you may find out that you don't have the cash immediately available and end up paying the (usually very large) interest. It is possible to game this system to keep the \"\"free\"\" money in investments for the 12 months, as long as you are very careful to always follow the terms and dates. Because even one mishap can take away the small profits you could get for a 12 month investment of a few thousand dollars, it is rarely worth the effort.\"", "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
5c3139aedde08e386e58849ba5f9c969	If I plan to buy a car in cash, should I let the dealer know?	[ { "docid": "438bad75d87d85c9b5fcb2144e7da298", "text": "Ideally you would negotiate a car price without ever mentioning: And other factors that affect the price. You and the dealer would then negotiate a true price for the car, followed by the application of rebates, followed by negotiating for the loan if there is to be one. In practice this rarely happens. The sales rep asks point blank what rebates you qualify for (by asking get-to-know-you questions like where you work or if you served in the armed forces - you may not realize that these are do-you-qualify-for-a-rebate questions) before you've even chosen a model. They take that into account right from the beginning, along with whether they'll make a profit lending you money, or have to spend something to subsidize your zero percent loan. However unlike your veteran's status, your loan intentions are changeable. So when you get to the end you can ask if the price could be improved by paying cash. Or you could try putting the negotiated price on a credit card, and when they don't like that, ask for a further discount to stop you from using the credit card and paying cash.", "title": "" }, { "docid": "a531ae13f8165cbc32348746da7983e3", "text": "\"Yes you tell them. I can say that I pay cash for all my cars and always get cars for lower than the TrueCar low-end. There are basically two steps: go test drive, negotiate fully, leave (unless you are given a mind-blowing offer). This may take you one to many dealerships. It depends on how well you know what car you want and how much a dealership will negotiate. you pick a night that another dealership that specifically has the car you want (or multiple - even better) is open and you go in 30-45 mins before they close. Paying cash is key for this to work. By the time you get to numbers they will be almost closed. Their finance guy might be gone so you will get your salesman and a manager. I will use my last car as an example. Toyota Highlander 2015 with MSRB 32,995. TrueCar at 29,795 with a good deal at 29,400. I simply talked to my sales guy said I would like to walk out with the car tonight. I have already talked to XYZ dealership and they offered me 28,500 - which is already below TrueCar low price. I asked for $27,900. Boom 10 minutes later car bought at 28,100. Cash is king. The sales guy and manager will bite the bullet on profit for ease of sale. Going in late is the key to using the cash. You don't have the finance guys jumping in and you have less people to move through. Also they know they have limited time to deal and if you walk off the lot there is less than 10% chance of you coming back - they want to close. They are making minimal profit but doing minimal work. With cash your sales guy is on your side because you are basically throwing him a couple hundred dollars at the end of a shift (where most would just be sitting around watching TV). Some other tips: be fair. If they would have said 28,300 is our lowest that we can go and that's it. I probably would have still got the car. Dealerships will tell you their lowest price if you are close and you are still below it. since they didn't show me their lowest price I didn't budge much but still budged a bit to show good sport. They brought their invoice number out to show that at 28,100 that they were going to lose $1500 on the car. I made the manager laugh because my response was to bring up KBB and show the used car price for the car, which was minus $2000. So I just said, \"\"Well you lost $1500 but I lose $2000 driving this off the lot.\"\" I then went back to $27,850 to meet in the middle of \"\"losing\"\" money. This actually closed the deal. Anyway don't ever believe any piece of paper they show you with numbers. These dealerships get monthly bonuses on sales and that is a lot of their profit past selling your trade-in. If you actually value your money you would never be trading in a car to a dealer so if you are paying cash, sell your own car or at least take it to a place like CarMax which I don't endorse but better than dealer.\"", "title": "" }, { "docid": "8a1f39931d478f146422f20709cd9041", "text": "\"Ditto other answers, but I'd add there's a lot of psychology going on in a sale. If you're paying cash, you presumably have a pretty fixed upper limit on what you can spend. But if you're getting a loan, a large increase in the price of the car may sound like just a small addition to the monthly payment. Also, these days dealers often try to roll \"\"extended warranties\"\" into the loan payment. Most people can't calculate loan amortizations in their heads -- I'm pretty good at math, and I need a calculator to work it out, assuming I remember or wrote down the formula -- a dealer can often stick a piece of paper in front of you saying \"\"Loan payment: $X per month\"\" with fine print that says that includes $50 for the extended warranty, and most people would just say, \"\"oh, okay\"\".\"", "title": "" }, { "docid": "fb32ab169c1794b67f1a1ee65fd22d70", "text": "If you buy a car using a loan, the dealer gets benefited by the financing institution by the way of referring fee paid to the dealer by the institution, and that too if the dealer has helped in financing the purchase. Otherwise for the dealer it doesn't matter if one pays in full or through financing. The dealer is paid in full in either cases. Hence the dealer may slightly get disappointed that you are not taking a loan.", "title": "" }, { "docid": "277d4423be680399e5c346d4177ce244", "text": "In the UK at least, dealers definitely want you to take finance. They get benefits from the bank (which are not insubstantial) for doing this; these benefits translate directly to increased commission and internal rewards for the individual salesman. It's conceivable that the salesman will be less inclined to put himself out for you in any way by sweetening your deal as much as you'd like, if he's not going to get incentives out of it. Indeed, since he's taking a hit on his commission from you paying in cash, it's in his best interests to perhaps be firmer with you during price negotiation. So, will the salesman be frustrated with you if you choose to pay in cash? Yes, absolutely, though this may manifest in different ways. In some cases the dealer will offer to pay off the finance for you allowing you to pay directly in cash while the dealer still gets the bank referral reward, so that everyone wins. This is a behind-the-scenes secret in the industry which is not made public for obvious reasons (it's arguably verging on fraud). If the salesman likes you and trusts you then you may be able to get such an arrangement. If this does not seem likely to occur, I would not go out of my way to disclose that I am planning to pay with cash. That being said, you'll usually be asked very early on whether you are seeking to pay cash or credit (the salesman wants to know for the reasons outlined above) and there is little use lying about it when you're shortly going to have to come clean anyway.", "title": "" } ]	[ { "docid": "908bb1c1bfc0b6588872a25b38b982be", "text": "I think you are a little confused. If you have 10.000€ in cash for a car, but you decide instead to invest that money and take out a loan for the car at 2,75% interest, you would have to withdraw/sell 178€ each month from your investment to make your loan payment. If you made exactly 2,75% on your investment, you would be left with 0€ in your investment when the loan was paid off. If your investment did better than 2,75%, you would come out ahead, and if your investment did worse than 2,75%, you would have lost money on your decision. Having said all that, I don't recommend borrowing money to buy a car, especially if you have that amount of cash set aside for the car. Here are some of the reasons: Sometimes people feel better about spending large amounts of money if they can pay it off over time, rather than spending it all at once. They tell themselves that they will come out ahead with their investments, or they will be earning more later, or some other story to make themselves feel better about overspending. If getting the loan is allowing you to spend more money on a car than you would spend if you were paying cash, then you will not come out ahead by investing; you would be better off to spend a smaller amount of money now. I don't know where you are in the world, but where I come from, you cannot get a guaranteed investment that pays 2,75%. So there will be risk involved; if the next year is a bad one for your investment, then your investment losses combined with your withdrawals for your car payments could empty your investment before the car is paid off. Conversely, by skipping the 2,75% loan and paying cash for your car, you have essentially made a guaranteed 2,75% on this money, comparatively speaking. I don't know what the going rate is for car loans where you are, but often car dealers will give you a low loan rate in exchange for a higher sales price. As a result, you might think that you can easily invest and beat the loan rate, but it is a false comparison because you overpaid for the car.", "title": "" }, { "docid": "d1f1aa4fd1d65fa135ec33d4155d334c", "text": "\"You are correct to be wary. Car dealerships make money selling cars, and use many tactics and advertisements to entice you to come into their showroom. \"\"We are in desperate need of [insert your make, model, year and color]! We have several people who want that exact car you have! Come in and sell it to us and buy a new car at a great price! We'll give you so much money on your trade in!\"\" In reality, they play a shell game and have you focus on your monthly payment. By extending the loan to 4 or 5 years (or longer), they can make your monthly payment lower, sure, but the total amount paid is much higher. You're right: it's not in your best interest. Buy a car and drive it into the ground. Being free of car payments is a luxury!\"", "title": "" }, { "docid": "12262c326568149698533a3c185be27c", "text": "If a shop offers 0% interest for purchase, someone is paying for it. e.g., If you buy a $X item at 0% interest for 12 months, you should be able to negotiate a lower cash price for that purchase. If the store is paying 3% to the lender, then techincally, you should be able to bring the price down by at least 2% to 3% if you pay cash upfront. I'm not sure how it works in other countries or other purchases, but I negotiated my car purchase for the dealer's low interest rate deal, and then re-negotiated with my preapproved loan. Saved a good chunk on that final price!", "title": "" }, { "docid": "bcccf69a9f98dfcff83c699440ea1e54", "text": "\"If you were making that large of a payment (via a cashiers check or other withdrawal means from a cash account) to a credit card, would the payment generate a Cash Transaction Report? Probably, yes. If it does require the bank to make a CTR, then is there any harm in that or anything to be concerned about (like that transaction appearing suspicious, personal reporting implications, etc.)? Are there any other reasons why one might want to make sure payments to a credit card are broken up made* in amounts smaller than $10K? You should be concerned if you cannot explain the source of the money (legally...). If you withdrew cash from your own account and paid your credit card with it, in case of questions asked you can show the account statement with the matching withdrawal, and you're done. The point in this report is to point at people who move around large amounts of cash. Usually, people pay credit cards with checks or ACH transactions, but if you want cash - it's your right, as long as the cash was obtained legally. But if you're paying your credit cards off with the cash you got as a bribe or by selling cocaine on the streets, then you should be worried. By the way, breaking into smaller payments may not save you from being reported to the money laundering detection agencies. The report is per transaction, not per payment, so if the credit card statement is $11K and you pay $5K and $6K - the transaction is still $11K. Also, the bank can file a report even if it is not required (it was clarified in the other answer to the same question you're referring to), if the clerk thinks the transaction is suspicious. This leaves the decision on filing a report solely on the banks \"\"common sense\"\" and internal policies which you don't know. So even paying $10 in cash may trigger a report if the bank suspects wrongdoing.\"", "title": "" }, { "docid": "230bf99815c0f1b4b3d8aea5c08f2c0f", "text": "The car dealership doesn't care where you get the cash; they care about it becoming their money immediately and with no risk or complications. Any loan or other arrangements you make to raise the cash is Your Problem, not theirs, unless you arrange the loan through them.", "title": "" }, { "docid": "06b62f2e839c4409e58c08dab7ad9f74", "text": "1) How long have you had the car? Generally, accounts that last more than a year are kept on your credit report for 7 years, while accounts that last less than a year are only kept about 2 years (IIRC - could someone correct me if that last number is wrong?). 2) Who is the financing through? If it's through a used car dealer, there's a good chance they're not even reporting it to the credit bureaus (I had this happen to me; the dealer promised he'd report the loan so it would help my credit, I made my payments on time every time, and... nothing ever showed up. It pissed me off, because another positive account on my credit report would have really helped my score). Banks and brand name dealers are more likely to report the loan. 3) What are your expected long term gains on the stocks you're considering selling, and will you have to pay capital gains on them when you do sell them? The cost of selling those stocks could possibly be higher than the gain from paying off the car, so you'll want to run the numbers for a couple different scenarios (optimistic growth, pessimistic, etc) and see if you come out ahead or not. 4) Are there prepayment penalties or costs associated with paying off the car loan early? Most reputable financiers won't include such terms (or they'll only be in effect during the first few months of the loan), but again it depends on who the loan is through. In short: it depends. I know people hate hearing answers like that, but it's true :) Hopefully though, you'll be able to sit down and look at the specifics of your situation and make an informed decision.", "title": "" }, { "docid": "ab573c1f875dcbc6bc45473c81083849", "text": "\"A while back I sold cars for a living. Over the course of 4 years I worked for 3 different dealerships. I sold new cars at 2 and used at the last one. When selling new cars I found that the majority of people buying the higher end cars honestly shouldn't have been - 80%+. They almost always came in owing more on their trades then they were worth, put down very little cash and were close to being financially strapped. From a financial perspective these deals were hard to close, not because the buyer was picky but rather because their finances were a mess. Fully half, and probably more, we had to switch from the car they initially wanted down to a much cheaper version or try to convert to a lease because it was the only way the bank would loan the money. We called them \"\"$30,000 millionaires\"\" because they didn't make a whole lot but tried to look like they did. As a salesman you knew you were in serious trouble when they didn't even try to negotiate. Around 2% of the deals I did were actual cash deals - meaning honest cash, not those who came in with a pre-approved loan from a bank. These were invariably for used cars about 3 to 4 years old and they never had a trade in. The people doing this always looked comfortable but never dressed up, you wouldn't even look at them twice. The negotiations were hard because they knew exactly how much that car should go for and wouldn't even pay that. It was obvious they knew the value of money. That said, I've been in the top 3% of wage earners for about 20 years and at no point have I considered myself in a position to \"\"afford\"\" a new \"\"luxury\"\" car. IMHO, there are far more important things you can do with that kind of money.\"", "title": "" }, { "docid": "ca02d79a218a5da56b3ad28ddecc2d10", "text": "\"I have a very simple rule. For anything other than trivial purchases (a small fraction of my monthly income), the only final decision I will make in the presence of a salesperson is \"\"No\"\". After I have the terms nailed down, and still feel that I am likely to buy the item, I leave the store, car dealership etc., and think about it by myself. Often, I go to a mall coffee shop to do the thinking. If it is really big, I sleep on it and make my decision the next day. Once I have made my decision, I inform the salesperson. If the decision is \"\"No\"\" I do not discuss my reasons - that gives them an overcome-the-objection lever. I just tell them I have decided not to buy the item, which is all they need to know.\"", "title": "" }, { "docid": "2c91d469adaf30cb4392e92342f5ad50", "text": "\"Unfortunately, it's not unusual enough. If you're looking for a popular car and the dealer wants to make sure they aren't holding onto inventory without a guarantee for sale, then it's a not completely unreasonable request. You'll want to make sure that the deposit is on credit card, not cash or check, so you can dispute if an issue arises. Really though, most dealers don't do this, requiring a deposit, pre sale is usually one of those hardball negotiating tactics where the dealer wrangles you into a deal, even if they don't have a good deal to make. Dealers may tell you that you can't get your deposit back, even if they don't have the car you agreed on or the deal they agreed to. You do have a right for your deposit back if you haven't completed the transaction, but it can be difficult if they don't want to give you your money back. The dealer doesn't ever \"\"not know if they have that specific vehicle in stock\"\". The dealer keeps comprehensive searchable records for every vehicle, it's good for sales and it's required for tax records. Even when they didn't use computers for all this, the entire inventory is a log book or phone call away. In my opinion, I would never exchange anything with the dealer without a car actually attached to the deal. I'd put down a deposit on a car transfer if I were handed a VIN and verified that it had all the exact options that we agreed upon, and even then I'd be very cautious about the condition.\"", "title": "" }, { "docid": "6d5910124726284e0e65d9ed7ffacf81", "text": "\"I love John's answer, but I just can't help myself from adding my 2 cents, even though it's over 5 years later. I sold cars for a while in the late 90s, and I mostly agree with John's answer. Where I disagree though, is that where I worked, the salesperson did not have ANY authority to make a sale. A sales manager was required to sign off on every sale. That doesn't mean that the manager had to interact with the buyer, that could all be handled behind the scenes, but the pricing and even much of the negotiating strategies were dictated by the sales managers. Some of the seasoned salespeople would estimate numbers on their own, but occasionally you'd hear the managers still chew them out with \"\"I wish you wouldn't have said that\"\". Of course, every dealership is different. Additional purchase advice: There is a strategy that can work well for the buyer, but only in scenarios where the salesperson is trying to prevent you from leaving. They may start interrupting you as you are packing up, or blocking your path to the door, or even begging. If this happens, they are obviously desperate for whatever reason. In this case, if you came prepared with research on a good price that you are comfortable with, then shoot lower and hold firm to the point of near exhaustion. Not so low that that they realize you're too far away- they will let you leave at that point. It needs to be within a reasonable amount, perhaps at most 1-2% of the purchase price. Once you detect the salesperson is desperate, you finally move up to your goal number or possibly a little lower. Typically the salesperson will be so happy to have gotten you to move at all that they'll accept. And if the managers are fed up too (like 45 minutes after close), they'll accept too. I saw this happen multiple times in a high pressure scenario. I also used it once myself as a buyer. If you are planning to purchase options that can be added at the dealer rather than from the factory, keep them up your sleeve at first. Get your negotiations down to where you are a little further apart than the invoice price of the option, then make your move. For example, suppose the option you want retails for $350 with an invoice of $300. Get within about $400 of the dealer. Then offer to pay their price, but only if they throw in the option you want. This will throw them completely off guard because they didn't expect it and all of their calculations were based on without it. If they say yes, you effectively moved $100 and they moved $300. It's much more likely that they'll agree to this than taking $300 off the price of the car. (I'm guessing the reason for this is partially due to how their accounting works with sticker price vs aftermarket price, and partially psychological.) Note, this works best with new cars, and make sure you only do this if it's for items they can add after the fact. Even if they don't have the part in stock it's ok, they can give you an IOU. But if the option requires a car change to something they don't have on the lot, it will probably just make them mad.\"", "title": "" }, { "docid": "f66e25bacedbdcc71660c7a8b122bb2e", "text": "The only issue I can see is that the stranger is looking to undervalue their purchase to save money on taxes/registration (if applicable in your state). Buying items with cash such as cars, boats, etc in the used market isn't all that uncommon* - I've done it several times (though not at the 10k mark, more along about half of that). As to the counterfeit issue, there are a couple avenues you can pursue to verify the money is real: *it's the preferred means of payment advocated by some prominent personal financial folks, including Dave Ramsey", "title": "" }, { "docid": "393ee932bbcbbe5f9751ffa34a64af45", "text": "\"It sounds like you're basing your understanding of your options regarding financing (and even if you need a car) on what the car salesman told you. It's important to remember that a car salesman will do anything and say anything to get you to buy a car. Saying something as simple as, \"\"You have a low credit score, but we can still help you.\"\" can encourage someone who does not realize that the car salesman is not a financial advisor to make the purchase. In conclusion,\"", "title": "" }, { "docid": "dc46bad77cc109cfa403d08ea54ba070", "text": "If they bring cash, meet at your bank to verify. If they want to use cashiers check, meet them at their bank. Large amounts use wires directly to your acct and verify (not only received, but deposited) before handing over the title/keys.", "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": "168704f710afdf153cf1d910d90c06eb", "text": "\"You can greatly reduce the risk if you can line up a buyer prior to purchasing the car. That kind of thing is common in business, one example is drop shipping. Also there are sales companies that specialize in these kinds of things bringing manufacturers of goods together with customers. The sales companies never take delivery of the product, just a commission on the sales. From this the manufacturers are served as they have gained a customer for their goods. The buying company is served as they can make a \"\"better\"\" end product. The two parties may have not been brought together had it not been for the sales company so on some level both are happy to pay for the service. Can you find market inequalities and profit from them? Sure. I missed a great opportunity recently. I purchased a name brand shirt from a discount store for $20. Those shirts typically sell on ebay for $80. I should have cleaned out that store's inventory, and I bet someone else did as by the time I went back they were gone. That kind of thing was almost risk-less because if the shirts did not sell, I could simply return them for the full purchase price. That and I can afford to buy a few hundred dollars worth of shirts. Can you afford to float 45K CDN? What if it takes a year to sell the car? What if the economy goes sour and you are left \"\"holding the bag\"\"? Why are not car dealers doing exactly what you propose? Here in the US this type of thing is called \"\"horse trading\"\" and is very common. I've both lost and made money on these kind of deals. I would never put a significant amount of my net worth at risk.\"", "title": "" } ]	fiqa
db31c76ea9227aac5e60c2214dc7cd2a	Is there a good tool to view a stock portfolio's value as a graph?	[ { "docid": "94f119c9fab05e9547f93016e03b7aa8", "text": "Google Finance will do all the bullet points in your list and a few more. The only drawback is that you have to enter ALL buy and sell manually. It has an import feature, but it does not work with all trading software. http://www.google.com/finance Let me know if it works. Also, yahoo.com/finance has a good tool, but I still like better Google's application.", "title": "" }, { "docid": "21ad8c178fcaf9a290e700ecbcbab79c", "text": "I have no idea if Wikivest can handle options, but I've been pretty satisfied with it as a portfolio visualization tool. It links automatically with many brokerage accounts, and has breakdowns by both portfolio and individual investment levels.", "title": "" } ]	[ { "docid": "b1d2648f565e8e0df2a9d0e32014eebc", "text": "I'm mainly interested in scraping market data in order to create screening tools involving stock price technicals, stock fundamentals, derivatives, interest rate data, and futures contracts. I'm not aware of anyone making a screening tool that can integrate all of these things simultaneously. What is the best environment to create a tool like this?", "title": "" }, { "docid": "b642eb854449d0c4e04bb13fc651c04b", "text": "I am in complete agreement with you. The place i have found with the sort of charts you are looking for is stockcharts.com. To compare the percentage increase of several stocks over a period of 2 market-open days or more, which is quite useful to follow the changes in various stocks… etc., an example: Here the tickers are AA to EEEEE (OTC) and $GOLD / $SILVER for the spot gold / silver price (that isn't really a ticker). It is set to show the last 6 market days (one week+)...the '6' in '6&O'. You can change it in the URL above or change it on the site for the stocks you want... up to 25 in one chart but it gets really hard to tell them apart! By moving the slider just left of the ‘6’ at the bottom right corner of the chart, you can look at 2 days or more. For a specific time period in days, highlight the ‘6’ and type any number of market-open days you want (21 days = about one month, etc.). By setting a time period in days, and moving the entire slider, you can see how your stocks did in the last bull/bear run, as an example. The site has a full how-to, for this and the other types of charts they offer. The only problem is that many OTC stocks are not charted. Save the comparison charts you use regularly in a folder in your browser bookmarks. Blessings. I see the entire needed link isn't in blue... but you need it all.", "title": "" }, { "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": "58d1faa2f4156ea3d559119dac018463", "text": "Moody's is now Mergent Online. It's no longer being printed, and must be accessed digitally. In order to browse the database, check with your local public library or university to see if you can get access. (A University will probably require you to visit for access). Another good tool is Value Line Reports. They are printed information sheets on public companies that are updated regularly, and are convenient for browsing and for comparing securities. Again, check your local libraries. A lot of the public information you may be looking for can be found on Yahoo Finance, for free, from home. Yahoo finance, will give financial information, ratios, news, filings, analysis, all in one place.", "title": "" }, { "docid": "44e7a7cb513b863434091609d159ded7", "text": "I'm responsible for all our hedging. Since we sell the energy to end users we do mostly fixed buys, swaps and calls. I'm a excel guru and dabble a little in SQL. we have Crystal Ball as well but i have no idea how to use it. I guess I'm trying to figure out if there is a tool that people use to help me analyze the spreads. or perhaps some reading material to help me through this. This is what i've been working towards for so long and i really don't want to fuck this up", "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": "82c2ef3a0f37dfd65929f13ca4d90f18", "text": "I was going to comment above, but I must have 50 reputation to comment. This is a question that vexes me, and I've given it some thought in the past. Morningstar is a good choice for simple, well-organized financial histories. It has more info available for free than some may realize. Enter the ticker symbol, and then click either the Financials or the Key Ratios tab, and you will get 5-10 years of some key financial stats. (A premium subscription is $185 per year, which is not too outrageous.) The American Association of Individual Investors (AAII) provides some good histories, and a screener, for a $29 annual fee. Zacks allows you to chart a metric like EPS going back a long ways, and so you can then click the chart in order to get the specific number. That is certainly easier than sorting through financial reports from the SEC. (A message just popped up to say that I'm not allowed to provide more than 2 links, so my contribution to this topic will end here. You can do a search to find the Zacks website. I love StackExchange and usually consult it for coding advice. It just happens to be an odd coincidence that this is my first answer. I might even have added that aside in a comment, but again, I can't comment as of yet.) It's problem, however, that the universe of free financial information is a graveyard of good resources that no longer exist. It seems that eventually everyone who provides this information wants to cash in on it. littleadv, above, says that someone should be paid to organize all this information. However, think that some basic financial information, organized like normal data (and, hey, this is not rocket science, but Excel 101) should be readily available for free. Maybe this is a project that needs to happen. With a mission statement of not selling people out later on. The closest thing out there may be Quandl (can't link; do a search), which provides a lot of charts for free, and provides a beautiful and flexible API. But its core US fundamental data, provided by Sharadar, costs $150 per quarter. So, not even a basic EPS chart is available there for free. With all of the power that corporations have over our society, I think they could be tabulating this information for us, rather than providing it to us in a data-dumb format that is the equivalent of printing a SQL database as a PDF! A company that is worth hundreds of billions on the stock market, and it can't be bothered to provide us with a basic Excel chart that summarizes its own historical earnings? Or, with all that the government does to try to help us understand all of these investments, they cannot simply tabulate some basic financial information for us? This stuff matters a great deal to our lives, and I think that much of it could and should be available, for free, to all of us, rather than mainly to financial professionals and those creating glossy annual reports. So, I disagree that yet another entity needs to be making money off providing the BASIC transparency about something as simple as historical earnings. Thank you for indulging that tangent. I know that SE prides itself on focused answers. A wonderful resource that I greatly appreciate.", "title": "" }, { "docid": "4eeeb700522713da024781f45893656f", "text": "Interactive Brokers provides historical intraday data including Bid, Ask, Last Trade and Volume for the majority of stocks. You can chart the data, download it to Excel or use it in your own application through their API. EDIT: Compared to other solutions (like FreeStockCharts.com for instance), Interactive Brokers provides not only historic intraday LAST** trades but also historic BID and ASK data, which is very useful information if you want to design your own trading system. I have enclosed a screenshot to the chart parameter window and a link to the API description.", "title": "" }, { "docid": "5685b1ded2c93079cd5e6b11fdc85535", "text": "I found that an application already exists which does virtually everything I want to do with a reasonable interface. Its called My Personal Index. It has allowed me to look at my asset allocation all in one place. I'll have to enter: The features which solve my problems above include: Note - This is related to an earlier post I made regarding dollar cost averaging and determining rate of returns. (I finally got off my duff and did something about it)", "title": "" }, { "docid": "081512f0aaafbef6ec324b5e271c4821", "text": "\"Check out Professor Damodaran's website: http://pages.stern.nyu.edu/~adamodar/ . Tons of good stuff there to get you started. If you want more depth, he's written what is widely considered the bible on the subject of valuation: \"\"Investment Valuation\"\". DCF is very well suited to stock analysis. One doesn't need to know, or forecast the future stock price to use it. In fact, it's the opposite. Business fundamentals are forecasted to estimate the sum total of future cash flows from the company, discounted back to the present. Divide that by shares outstanding, and you have the value of the stock. The key is to remember that DCF calculations are very sensitive to inputs. Be conservative in your estimates of future revenue growth, earnings margins, and capital investment. I usually develop three forecasts: pessimistic, neutral, optimistic. This delivers a range of value instead of a false-precision single number. This may seem odd: I find the DCF invaluable, but for the process, not so much the result. The input sensitivity requires careful work, and while a range of value is useful, the real benefit comes from being required to answer the questions to build the forecast. It provides a framework to analyze a business. You're just trying to properly fill in the boxes, estimate the unguessable. To do so, you pore through the financials. Skimming, reading with a purpose. In the end you come away with a fairly deep understanding of the business, how they make money, why they'll continue to make money, etc.\"", "title": "" }, { "docid": "8874c2e14077c87317b65163a01e3d35", "text": "\"The graphing tools within Yahoo offer a decent level of adjustment. You can easily choose start and end years, and 2 or more symbols to compare. I caution you. From Jan 1980 through Dec 2011, the S&P would have grown $1 to $29.02, (See Moneychimp) but, the index went up from 107.94 to 1257.60, growing a dollar to only $11.65. The index, and therefore the charts, do not include dividends. So long term analysis will yield false results if this isn't accounted for. EDIT - From the type of question this is, I'd suggest you might be interested in a book titled \"\"Stock Market Logic.\"\" If memory serves me, it offered up patterns like you suggest, seasonal, relations to Presidential cycle, etc. I don't judge these approaches, I just recall this book exists from seeing it about 20 years back.\"", "title": "" }, { "docid": "699745e7c7937d1720f0f1a34cb89933", "text": "Hi guys, This is an app I've been working on over the summer. It's my belief that a lot of people want to learn about the stock market but in the end can't because they're turned off by long walls of text you get when you Google about them/read a textbook. I know there are other simplified solutions out there but they're not widely adopted yet and I don't think there are any (?) that were made app first. Anyway, check it out if you can. Appreciate all feedback/comments.", "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": "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": "f63cceb091fed668aefa3680076af07f", "text": "\"To know if a stock is undervalued is not something that can be easily assessed (else, everybody would know which stock is undervalued and everybody will buy it until it reaches its \"\"true\"\" value). But there are methods to assess the value of a company, I think that the 3 most known methods are: If the assets of the company were to be sold right now and that all its debts were to be paid back right now, how much will be left? This remaining amount would be the fundamental value of your company. That method could work well on real estate company whose value is more or less the buildings that they own minus of much they borrowed to acquire them. It's not really usefull in the case of Facebook, as most of its business is immaterial. I know the value of several companies of the same sector, so if I want to assess the value of another company of this sector I just have to compare it to the others. For example, you find out that simiral internet companies are being traded at a price that is 15 times their projected dividends (its called a Price Earning Ratio). Then, if you see that Facebook, all else being equal, is trading at 10 times its projected dividends, you could say that buying it would be at a discount. A company is worth as much as the cash flow that it will give me in the future If you think that facebook will give some dividends for a certain period of time, then you compute their present value (this means finding how much you should put in a bank account today to have the same amount in the future, this can be done by dividing the amount by some interest rates). So, if you think that holding a share of a Facebook for a long period of time would give you (at present value) 100 and that the share of the Facebook is being traded at 70, then buy it. There is another well known method, a more quantitative one, this is the Capital Asset Pricing Model. I won't go into the details of this one, but its about looking at how a company should be priced relatively to a benchmark of other companies. Also there are a lot's of factor that could affect the price of a company and make it strays away from its fundamental value: crisis, interest rates, regulation, price of oil, bad management, ..... And even by applying the previous methods, the fundemantal value itself will remain speculative and you can never be sure of it. And saying that you are buying at a discount will remain an opinion. After that, to price companies, you are likely to understand financial analysis, corporate finance and a bit of macroeconomy.\"", "title": "" } ]	fiqa
ab213d1097b764a8a6a1f730ce738e08	Is there an online cost-basis calculator that automatically accounts for dividend re-investments and splits?	[ { "docid": "3daa8dfcc2bb62b6a3a6ee4291dda11f", "text": "Google Finance portfolios take into account splits and cash deposits/withdrawals.", "title": "" }, { "docid": "2cb94464a77b00425f9ce06a9382f6db", "text": "Reinvestment creates a nightmare when it comes time to do taxes, sadly. Tons of annoying little transactions that happened automatically... Here's one article trying to answer your question: http://www.smartmoney.com/personal-finance/taxes/figuring-out-your-cost-basis-when-youve-lost-the-statements-9529/ You could also try this thing: http://www.gainskeeper.com/us/BasisProIndividual.aspx But I couldn't tell you if it would help. If it makes you feel better, brokerages are now required by the IRS to track your basis for you, so for new transactions and assets you shouldn't end up in this situation. Doesn't help with the old stuff ;-)", "title": "" }, { "docid": "51b8666a42d8e6aa0626cd4367ee50a7", "text": "Calculating and adjusting cost basis accurately is a daunting task, but there is a (paid) online tool, NetBasis, which will automatically calculate and adjust your cost basis. It is used by brokerage firms and Fortune 500 companies and is available to the public. Go to netbasis.com. All you need are the purchase and sale dates and shares of the stock or mutual fund and the system has the rest of the information, such as corporate actions (splits, spin-offs, etc), pricing, and dividends and it also will apply the appropriate IRS rules for inherited and gifted shares. The regulation also gives investors the option to choose calculation methods. Not only does NetBasis automatically calculate the method you choose, it will also give the results for all options and allow you to choose the best result. NetBasis also provides you with detailed supporting documentation which shows all of the calculations and the adjustments in chronological order. NetBasis has data going back as far as 1925, so it will accurately calculate cost basis for your old American Telegraph and Telephone shares. NetBasis also handles complex investment scenarios such as wash sales, short sales, return of capital, etc. Moderator's note: Disclosure: The answerer's profile indicates they are affiliated with NetBasis.", "title": "" } ]	[ { "docid": "67d0933ebc414d7cc9167018cbc619f2", "text": "I am not a tax professional, only an investment professional, so please take the following with a grain of salt and simply as informational guidance, not a personal recommendation or solicitation to buy/sell any security or as personal tax or investment advice. As Ross mentioned, you need to consult a tax advisor for a final answer concerning your friend's personal circumstances. In my experience advising hundreds of clients (and working directly with their tax advisors) the cost basis is used to calculate tax gain or loss on ordinary investments in the US. It appears to me that the Edward Jones description is correct. This has also been the case for me personally in the US with a variety of securities--stocks, options, futures, bonds, mutual funds, and exchange traded funds. From the IRS: https://www.irs.gov/uac/about-form-1099b Form 1099-B, Proceeds From Broker and Barter Exchange Transactions A broker or barter exchange must file this form for each person: Edward Jones should be able to produce a 1099b documenting the gains/losses of any investments. If the 1099b document is confusing, they might have a gain/loss report that more clearly delineates proceeds, capital returns, dividends, and other items related to the purchase and sale of securities.", "title": "" }, { "docid": "7e6a30f5616e94418f406aebfface37b", "text": "Have you looked into GnuCash? It lets you track your stock purchases, and grabs price updates. It's designed for double-entry accounting, but I think it could fit your use case.", "title": "" }, { "docid": "1ebc364846535cd64021290e9b7af494", "text": "You could create your own spreadsheet of Cash Flows and use the XIRR function in Excel: The formula is:", "title": "" }, { "docid": "7e1b383fd0db28de0e0948544e307d5f", "text": "Yes, add the stocks/mutual funds that you want and then you would just need to add all the transactions that you theoretically would have made. Performing the look up on the price at each date that you would have sold or bought is quite tedious as well as adding each transaction.", "title": "" }, { "docid": "eaf8fbb6297344fa58d97ad8831b11ca", "text": "Having all of the numbers you posted is a start. It's what you need to perform the calculation. The final word, however, comes from the company itself, who are required to issue a determination on how the spin-off is valued. Say a company is split into two. Instead of some number of shares of each new company, imagine for this example it's one for one. i.e. One share of company A becomes a share each in company B and company C. This tell us nothing about relative valuation, right? Was B worth 1/2 of the original company A, or some other fraction? Say it is exactly a 50/50 split. Company A releases a statement that B and C each should have 1/2 the cost basis of your original A shares. Now, B and C may very well trade ahead of the stock splitting, as 'when issued' shares. At no point in time will B and C necessarily trade at exactly the same price, and the day that B and C are officially trading, with no more A shares, they may have already diverged in price. That is, there's nothing you can pull from the trading data to identify that the basis should have been assigned as 50% to each new share. This is my very long-winded was of explaining that the company must issue a notice through your broker, and on their investor section of their web site, to spell out the way you should assign your basis to each new stock.", "title": "" }, { "docid": "a12da22d330b7e220f7cd8e070ac02ec", "text": "\"You can calculate the \"\"return on investment\"\" using libreoffice, for example. Look at the xirr function. You would have 2 columns, one a list of dates (ie the dates of the deposits or dividends or whatever that you want to track, the last entry would be today's date and the value of the investment today. The xirr function calculates the internal rate of return for you. If you add money to the account, and the current value includes the original investment and the added funds, it will be difficult to calculate the ROI. If you add money by purchasing additional shares (or redepositing dividends by buying additional shares), and you only want to track the ROI of the initial investment (ignoring future investments), you would have to calculate the current value of all of the added shares (that you don't want to include in the ROI) and subtract that value from the current total value of the account. But, if you include the dates and values of these additional share purchases in the spreadsheet, xirr will calculate the overall IRR for you.\"", "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": "cbe2602216d25f7f2f97e3625c46ea0b", "text": "\"(Value of shares+Dividends received)/(Initial investment) would be the typical formula though this is more of a percentage where 1 would indicate that you broke even, assuming no inflation to be factored. No, you don't have to estimate the share price based on revenues as I would question how well did anyone estimate what kind of revenues Facebook, Apple, or Google have had and will have. To estimate the value of shares, I'd likely consider what does my investment strategy use as metrics: Is it discounted cash flow, is it based on earnings, is it something else? There are many ways to determine what a stock \"\"should be worth\"\" that depending on what you want to believe there are more than a few ways one could go.\"", "title": "" }, { "docid": "a1ae49664cd8b97b99849aab8d3bce30", "text": "Adjustments can be for splits as well as for dividends. From Investopedia.com: Historical prices stored on some public websites, such as Yahoo! Finance, also adjust the past prices of the stock downward by the dividend amount. Thus, that could also be a possible factor in looking at the old prices.", "title": "" }, { "docid": "38bdbd4c2225ed3344f2d36eb24aa6d8", "text": "You can use a tool like WikiInvest the advantage being it can pull data from most brokerages and you don't have to enter them manually. I do not know how well it handles dividends though.", "title": "" }, { "docid": "8f94c2aedfcae7a40f3f9d639c2e702a", "text": "Your investment is probably in a Collective Investment Trust. These are not mutual funds, and are not publicly traded. I.e. they are private to plan participants in your company. Because of this, they are not required* to distribute dividends like mutual funds. Instead, they will reinvest dividends automatically, increasing the value of the fund, rather than number of shares, as with dividend reinvestment. Sine you mention the S&P 500 fund you have tracks closely to the S&P Index, keep in mind there's two indexes you could be looking at: Without any new contributions, your fund should closely track the Total Return version for periods 3 months or longer, minus the expense ratio. If you are adding contributions to the fund, you can't just look at the start and end balances. The comparison is trickier and you'll need to use the Internal Rate of Return (look into the XIRR function in Excel/Google Sheets). *MFs are not strictly required to pay dividends, but are strongly tax-incentivized to do so, and essentially all do.", "title": "" }, { "docid": "616669427b16951427638365fcc9f849", "text": "I have found The DRiP Investing Resource Center to be a useful resource for more information about DRIP investing. Moneypaper.com offers a list of companies offering both direct purchase options and dividend reinvestment plans. For those offering dividend reinvestment plans, but not direct purchase, you have the option of using a service to purchase your first shares to enroll in the DRIP program. The tax paperwork for DRIPs is a pain due to the partial shares purchased over time when you have to figure out your own cost basis upon sale of shares , but a spreadsheet and a FIFO (first in first out) approach makes it not too much of a headache. -MU", "title": "" }, { "docid": "bf0540111a2051185227f72005547c32", "text": "\"Generally if you are using FIFO (first in, first out) accounting, you will need to match the transactions based on the number of shares. In your example, at the beginning of day 6, you had two lots of shares, 100 @ 50 and 10 @ 52. On that day you sold 50 shares, and using FIFO, you sold 50 shares of the first lot. This leaves you with 50 @ 50 and 10 @ 52, and a taxable capital gain on the 50 shares you sold. Note that commissions incurred buying the shares increase your basis, and commissions incurred selling the shares decrease your proceeds. So if you spent $10 per trade, your basis on the 100 @ 50 lot was $5010, and the proceeds on your 50 @ 60 sale were $2990. In this example you sold half of the lot, so your basis for the sale was half of $5010 or $2505, so your capital gain is $2990 - 2505 = $485. The sales you describe are also \"\"wash sales\"\", in that you sold stock and bought back an equivalent stock within 30 days. Generally this is only relevant if one of the sales was at a loss but you will need to account for this in your code. You can look up the definition of wash sale, it starts to get complex. If you are writing code to handle this in any generic situation you will also have to handle stock splits, spin-offs, mergers, etc. which change the number of shares you own and their cost basis. I have implemented this myself and I have written about 25-30 custom routines, one for each kind of transaction that I've encountered. The structure of these deals is limited only by the imagination of investment bankers so I think it is impossible to write a single generic algorithm that handles them all, instead I have a framework that I update each quarter as new transactions occur.\"", "title": "" }, { "docid": "35ec6ed1d2beb27b9ab3d584c9de8470", "text": "Dividend yield is a tough thing to track because it's a moving target. Dividends are paid periodically the yield is calculated based on the stock price when the dividend is declared (usually, though some services may update this more frequently). I like to calculate my own dividend by annualizing the dividend payment divided by my cost basis per share. As an example, say you have shares in X, Co. X issues a quarterly dividend of $1 per share and the share price is $100; coincidentally this is the price at which you purchased your shares. But a few years goes by and now X issues it's quarterly dividend of $1.50 per share, and the share price is $160. However your shares only cost you $100. Your annual yield on X is 6%, not the published 3.75%. All of this is to say that looking back on dividend yields is somewhat similar to nailing jello to the wall. Do you look at actual dividends paid through the year divided by share price? Do you look at the annualized dividend at the time of issue then average those? The stock price will fluctuate, that will change the yield; depending on where you bought your stock, your actual yield will vary from the published amount as well.", "title": "" }, { "docid": "835aea544af9ee19eb114bf793e8f425", "text": "\"I keep spreadsheets that verify each $ distribution versus the rate times number of shares owned. For mutual funds, I would use Yahoo's historical data, but sometimes shows up late (a few days, a week?) and it isn't always quite accurate enough. A while back I discovered that MSN had excellent data when using their market price chart with dividends \"\"turned on,\"\" HOWEVER very recently they have revamped their site and the trusty URLs I have previously used no longer work AND after considerable browsing, I can no longer find this level of detail anywhere on their site !=( Happily, the note above led me to the Google business site, and it looks like I am \"\"back in business\"\"... THANKS!\"", "title": "" } ]	fiqa
0b80bbc7ef31fc02c29ed62a25dd00fc	Walking away from an FHA loan	[ { "docid": "9d0d0ed7b33202c9137a9b469d8bf1cf", "text": "According to the Trulia reference on the issue, New York is a recourse state. Recourse means that the lender can go after you for the difference between the foreclosure discharge amount (in New York - the higher of the FMV or the actual sale price) and the debt balance. That includes garnishing your wages, seizing your assets, and any other method of collecting the judgement. The relevant law is in the New York Consolidated Laws - RPA Article 13. The option you're talking about is the option any lender has anywhere - not to sue you for the difference (provision 3 of the paragraph): If no motion for a deficiency judgment shall be made as herein prescribed the proceeds of the sale regardless of amount shall be deemed to be in full satisfaction of the mortgage debt and no right to recover any deficiency in any action or proceeding shall exist. So if during the foreclosure they didn't sue you for the difference - they cannot change their mind after that. If you're not sure you can repay the loan - you should probably walk away from the deal.", "title": "" }, { "docid": "69680bbfebdbbdb0d36fc00477a04d01", "text": "Nearly every state in the US is full-recourse. If one doesn't seek bankruptcy protection, creditors can seek judgement, and collect assets. Foreclosures frequently sell for approximately half the market price. Considering unemployment risk, homes can be risky. A far better way to accumulate wealth is with equities (stocks). However, the risk converts from insolvency to liquidation since during times of high unemployment, equities are also cheap, causing any liquidation used to fund current expenses to be potentially ruinous.", "title": "" }, { "docid": "331c6c280e5a0c64549ac6d0212cb618", "text": "\"One additional penalty is you will be put on the CAIVRS (\"\"cavers\"\") for your default on the FHA mortgage which will preclude you from FHA financing in the future. When purchasing the multifamily unit it is an FHA requirement that you occupy one of the units. Lastly, I would advise against FHA due to elevated costs. Conventional options have 95% financing options, and don't have mortgage insurance that lasts forever, like FHA does.\"", "title": "" } ]	[ { "docid": "bb65af7be3ce30209c971bb477b6a2ba", "text": "The fact that a lawsuit has been filed is not ipso facto evidence of wrongdoing. BoA has a lot of ugliness yet un-accounted-for, but escrowing insurance and taxes is 100% standard practice, to the point where you cannot get a conventional mortgage that doesn't escrow that stuff. NO bank will give or carry a conventional home-loan without escrowing taxes and insurance. If you have a conventional mortgage, your insurance and tax payments are made by the mortgager whether or not you pay, because the bank doesn't want the house (their collateral) repo'd or destroyed due to lack of a $100 insurance/tax payment. To the point, no bank in 2011 wants more foreclosed homes on their books. Banks lose money in foreclosure. The thesis that BoA conspired to get a bigger portfolio of underwater homes defies sanity. Just because BoA robbed a liquor store doesn't mean that they also molested children and killed JFK. There might be a colossal paperwork snafu here that BoA has to make right, but that can be unwound. But the narrative that BoA was gaming the paperwork to get a higher ratio of foreclosures on their books doesn't make sense.", "title": "" }, { "docid": "66002fb9387b1f794929de8adce812a2", "text": "\"This summer I used a loan from my 401(k) to help pay for the down payment of a new house. We planned on selling a Condo a few months later, so we only needed the loan for a short period but wanted to keep monthly payments low since we would be paying two mortgages for a few months. I also felt like the market might take a dip in the future, so I liked the idea of trying to cash out high and buy back low (spoiler alert: this didn't happen). So in July 2017 I withdrew $17,000 from my account (Technically $16,850.00 principal and $150 processing fee) at an effective 4.19% APR (4% rate and then the fee), with 240 scheduled payments of $86.00 (2 per month for 10 years). Over the lifetime of the loan the total finance charge was $3,790, but that money would be paid back into my account. I was happy with the terms, and it helped tide things over until the condo was sold a few months later. But then I decided to change jobs, and ended up having to pay back the loan ~20 weeks after it was issued (using the proceeds from the sale of the condo). During this time the market had done well, so when I paid back the funds the net difference in shares that I now owned (including shares purchased with the interest payments) was $538.25 less than today's value of the original count of shares that were sold to fund the loan. Combined with the $150 fee, the overall \"\"cost\"\" of the 20 week loan was about 4.05%. That isn't the interest rate (interest was paid back to my account balance), but the value lost due to the principal having been withdrawn. On paper, my account would be worth that much more if I hadn't withdrawn the money. Now if you extrapolate the current market return into 52 weeks, you can think of that loan having an APR \"\"cost\"\" of around 10.5% (Probably not valid for a multi year calculation, but seems accurate for a 12 month projection). Again, that is not interest paid back to the account, but instead the value lost due to the money not being in the account. Sure, the market could take a dip and I may be able to buy the shares back at a reduced cost, but that would require keeping sizable liquid assets around and trying to time the market. It also is not something you can really schedule very well, as the loan took 6 days to fund (not including another week of clarifying questions back/forth before that) and 10 day to repay (from the time I initiated the paperwork to when the check was cashed and shares repurchased). So in my experience, the true cost of the loan greatly depends on how the market does, and if you have the ability to pay back the loan it probably is worth doing so. Especially since you may be forced to do so at any time if you change jobs or your employment is terminated.\"", "title": "" }, { "docid": "520828c07ea027998e5d672ff226aeff", "text": "\"I highly recommend you read the \"\"related\"\" posted linked to the right. Once you have the loan a year, in good standing, and have paid the mortgage to 80% LTV, you can request removal of PMI. But the bank can charge you for an appraisal, and if the house dropped even a few percent in value, you might need to put up more money.\"", "title": "" }, { "docid": "a6e78d648403a607c83fb538ac0fd1d7", "text": "I have recently been the lender to a couple people. It was substantially less money (~$3k), but I was trusting their good faith to pay me back. As a lender, I will never do it again. Reasons, Overall, not worth it.", "title": "" }, { "docid": "bd157acb0e9dec2b7b4343d6a0a95b9d", "text": "Maybe you know something I don't, but as far as I'm aware, you can't get rid of it. Student loans are with you for life. You will be sent to collections, but it doesn't disappear after 7 years. Settlements are incredibly rare unless your loan is ballooning... in which case, a settlement doesn't change all that much. You will lose tax benefits, the government will garnish 15% of your wages, and you will be a debt slave until it's paid off. Defaulting on student loans is much, much more painful than defaulting on private loans. The only exception to this is if you've made 120 months of repayments while employed at a qualifying non-profit or governmental organization. And even then, it only applies to federal loans and there are exceptions (better not refinance or the clock resets, for example). Also, if you default, you will no longer be eligible. Private student loans have no escape hatch and are equally unforgiving. Thank your elected representatives.", "title": "" }, { "docid": "464c9b92963363ecd1df7012855d3cf6", "text": "If the homeowner knows the situation is hopeless, and the end result will be the loss of the home, jumping to the end result can be helpful. It is quicker, they don't spend as much time fighting a losing battle. Deed in Lieu of foreclosure is not so great for the borrower if the bank goes after them for the rest of the money owed. There can also be tax implications if the debt is forgiven. Though these issues also exist when the drawn out foreclosure option is done. For the bank. The longer the process the more the house deteriorates. The borrower may stop maintenance and may even vandalize the house. Getting their lock on the door quickly is important to them. They protect it, clean it, and prep it for sale right away. They also save on lawyer fees. They know that the moment they start the foreclosure process all money from the borrower stops, this can save thousands in carrying costs. One issue will be how the accounting losses will be divided among the servicing company, and the investors. If the servicing company will make more money from the longer process they may not push for the quick settlement. If the opposite is true, they will be quickly on board. For the new buyer, the issue with either foreclosure is that the longer process can result in greater hidden and visible damage. The heat pump may work, but the disgruntled homeowner stopped changing the filters the last six months. They may have also removed and damaged things on the way out. Other than that I don't see a big difference. Because the bank had lower costs involved in the foreclosure they might settle for a lower purchase price, but that might be hard to know.", "title": "" }, { "docid": "c3b9c2aa52af36e1cad740ee14f64992", "text": "\"Interestingly enough, \"\"strategic default\"\" seems to be more common than one might think in California and there is actually a lot of information available on it, to include a calculator that breaks down the numbers for you (although affiliated with a law office). Speaking from a purely financial standpoint, walking away only makes sense if it puts you in a better financial position than you were before while you had the mortgage. If you look at the downsides of walking away: The issues with the credit rating are will known but you need to take into account any open lines of credit you currently have as well as any need you might have to open a line of credit in the future. If you currently have credit cards, will the rates go up after the hit? On the housing side of things, you mortgage payment is currently a known quantity that will not change for the duration of the mortgage unless you do something to change it. However, it is fairly rare for rents to not change between years and if you want an apartment or house similar to what you currently have, you might find that the rent will fluctuate quite a bit between years and in the long run the rent might run higher than your current mortgage payment. Likewise, in the shorter term, if the landlord runs a credit check they might adjust what the rent is (or deny you the apartment) on the basis of the black mark on your history for reasons that other have mentioned. Another item to take into account is if you need to get a job in the future. Depending upon what you do for a living this might be a non-issue; however, if you are in a position of trust, walking away from a mortgage payment will reflect negatively upon your character unless you have a very good reason for it. This can lead to a loss of employment opportunities. Next, if you walk away from the mortgage you are walking away from the current value of the home and any future value that the home might have. If you like where you are living and aren't planning on moving to another part of the country, you are gambling that the market will not recover or that you would reach parity with what you owe by the time you need to sell the house. If you do plan on staying where you are and the house is in good repair, then in the long run you might be giving up quite a bit of money by walking away. These are a lot of factors to take into account though so its really hard to say one way or another if a strategic default is a good idea. In the long run you might come out ahead but knowing when that date is can be difficult to calculate. Likewise, in the long run it might adversely affect you and you might come to regret the decision. If the payments themselves are a bit too high, perhaps you can refinance or negotiate with the bank for a lower payment? If you get a better rate but keep your monthly payments the same then you might reach parity with the mortgage much faster which would also be to your advantage.\"", "title": "" }, { "docid": "3937c9a5cc05445f0d86e3c2158e016c", "text": "You could walk away from your mortgage. When you signed the mortgage you and the bank agreed that if you stopped making payments the bank would get the house. Give them the house. Of course this would be a huge hit to your credit score and you would probably not be able to obtain another mortgage at a decent rate for at least 7 years. You may have trouble obtaining other financing as well (i.e. auto loans). If you plan on moving to an apartment and don't need to finance car purchases this may be OK.", "title": "" }, { "docid": "fd5609bb27cf8730ce7d33454f9284f8", "text": "If you're planning to walk away from the house - don't invest any more money in it. Just be aware of the consequences. It may be worth considering a short sale if both the lenders will agree to erase the debt. If you're going to keep the house, then the fact that you're underwater now is irrelevant, and you should do your best to reduce the burden by paying off the higher rate loan. But, I personally think that accumulating enough cash to make you comfortable in case of a job loss for several months is a higher priority.", "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": "6e0f5a5bd8fcf16434ed72e82e14daf0", "text": "Consider that the bank of course makes money on the money in your escrow. It is nothing but a free loan you give the bank, and the official reasons why they want it are mostly BS - they want your free loan, nothing else. As a consequence, to let you out of it, they want the money they now cannot make on your money upfront, in form of a 'fee'. That explains the amount; it is right their expected loss by letting you out. Unfortunately, knowing this doesn't change your options. Either way, you will have to pay that money; either as a one-time fee, or as a continuing loss of interest. As others mentioned, you cannot calculate with 29 years, as chances are the mortgage will end earlier - by refinancing or sale. Then you are back to square one with another mandatory escrow; so paying the fee is probably not a good idea. If you are an interesting borrower for other banks, you might be able to refinance with no escrow; you can always try to negotiate this and make it a part of the contract. If they want your business, they might agree to that.", "title": "" }, { "docid": "cbd9dfe952f74b25dbcfbe52b673e532", "text": "\"A day or so later I get an email from the mattress company where the rep informs me that they will need to issue me a paper check for the full amount and that I would have to contact Affirm to stop charging me. To which I rapidly answered \"\"Please confirm that with Affirm prior to mailing anything out. On my end the loan was cancelled.\"\" To which the rep replied \"\"confirmed. It has been cancelled.\"\" I think your communication could have been more explicit mentioning that not only was the loan cancelled, you got your initial payments. You have not paid for the mattress. The refund if any should go to Affirm. The Rep has only confirmed that loan has been cancelled. at what point, if any, am i free to use this money? I was planning to just let it sit there until the shoe drops and just returning. But for how long is too long? Sooner or later the error would get realized and you would have to pay this back.\"", "title": "" }, { "docid": "ea86135aefc19f735f834aa9cfa4eac0", "text": "\"Pre-edit, Pete mentioned that he feels real estate agents would (a) like you to buy as much house as you afford, and (b) would love to show you three houses and have you choose one. As a real estate agent myself, I believe his warnings were understated. As with any industry, there are good and bad people. Agents are paid to move houses. If the median US home is under $200K, and commissions average say 5%, the $10,000 to be gained is split between the buyer brokerage and selling agent. The $5000 to each is then shared with 'the house.' So, this sale would net me $2500, gross. Move one a week, and the income is great, one per month, not so much. Tire kickers will waste an agent's time for a potential decision to wait another year and continue renting. Their obligation is to tell you the truth, but not to offer financial advice. Remember the mortgage crisis? It seems the banks and brokers aren't watching out for you either. They will tell you what they'll lend you, but not what you can afford. These numbers are worlds apart. I strongly recommend a 20% downpayment. The FHA PMI calculator shows that a 90% LTV (i.e. a 10% downpayment) for a $100K house will cost you $1200/yr in PMI. Think about this. For the $10,000 that you didn't put down, you are paying an extra $1200 each year. This is on top of the interest, so even at 5%, that last $10,000 is costing nearly 17%. If you can't raise that $10K (or whatever 10% is on that house) in cheaper funds, you should hold off. Using the 401(k) loan for this purpose is appropriate, yet emotionally charged. As if suck loans are written by the devil himself. \"\"Buy the biggest house you can\"\"? No. I have a better idea. Buy the smallest place you can tolerate. I have a living room (in addition to family room) that has been used 3 times in 20 years. A dining room we actually use. Twice per year. When your house is 50% too big, you pay 50% more property tax, more utility bills, and more maintenance. Closing costs, commission, etc, isn't cheap, but the lifetime cost of living in a too-big house is a money pit.\"", "title": "" }, { "docid": "8a5bb0e9b47404b931db4000eeea9f93", "text": "It's sad. My mother lost her job after a brutal divorce. BOA bought up Countrywide, then when my mother pleaded for assistance BOA said they could not help her unless she was behind/in default of her mortgage. She tried to do a deed-in-lieu with a lawyer and BOA refused to accept the deed-in-lieu many times. Then BOA sold her mortgage to Green Tree (?) and they refused her deed-in-lieu as well. This went on for over 2 years and they foreclosed on the house. I told my mother to sue because they should have accepted her deed-in-lieu because it was approved by the court in her bankruptcy but she was tired of trying to save her house that she just walked away. 6 months after she left and moved in with my sister Green Tree called her offering a refinance at a lower rate and a mortgage payment that was less than a typical car payment. Now 5 years later my mom is just going to pay cash for her house and never do a mortgage again.", "title": "" }, { "docid": "cf8ba571bcf9309ddcfadb55f28033eb", "text": "Once you hit 22% equity against the original value of the home, they have to cancel the PMI. No other factors come into play. See this nice overview. Before that, at the 20% equity mark, it's a negotiating situation. If the value of the house goes down, that's a strong point in their favour. But you have excellent history, that's strong in your favour.", "title": "" } ]	fiqa
9e418793302ecb1048cbf7622d0a2754	What impact does trading in a car have on your credit score?	[ { "docid": "9f434ca749d0d39db78849b606b457e7", "text": "Paying off your loan in full will most likely not help your credit score, and could potentially even hurt it. Because car loans are installment loans (and thus differ from consumer credit), lenders really only like seeing that you responsibly pay off your loans on time. They don't really care if you pay it off early--lenders like seeing open lines of credit as long as you manage them well. The hard inquiry will simply lower your credit score a few points for up to two years. So, from a credit score perspective, you're really not going to help yourself in this scenario (although it's not like you're going to be plummeting yourself either).", "title": "" } ]	[ { "docid": "2b5ce47533be35a241aa99f1f4f8fec9", "text": "No. Credit scores are primarily built by doing the following: To build credit, get a few major credit cards and a couple of store cards. Use one of them to make routine purchases like gas and groceries. Pay them on time every month. You're good to go. I would hate to sell stocks to pay off a loan -- try finding a better loan. If you financed through the dealer, try joining a credit union and see if you can get a better rate.", "title": "" }, { "docid": "78c7b2bf71f314407d951a11d5e096fb", "text": "\"It's possible the $16,000 was for more than the car. Perhaps extras were added on at purchase time; or perhaps they were folded into the retail price of the car. Here's an example. 2014: I'm ready to buy. My 3-year-old trade-in originally cost $15,000, and I financed it for 6 years and still owe $6500. It has lots of miles and excess wear, so fair blue-book is $4500. I'm \"\"upside down\"\" by $2000, meaning I'd have to pay $2000 cash just to walk away from the car. I'll never have that, because I'm not a saver. So how can we get you in a new car today? Dealer says \"\"If you pay the full $15,000 retail price plus $1000 of worthless dealer add-ons like wax undercoat (instead of the common discounted $14,000 price), I'll eat your $2000 loss on the trade.\"\" All gets folded into my new car financing. It's magic! (actually it's called rollover.) 2017: I'm getting itchy to trade up, and doggone it, I'm upside down on this car. Why does this keep happening to me? In this case, it's rollover and other add-ons, combined with too-long car loans (6 year), combined with excessive mileage and wear on the vehicle.\"", "title": "" }, { "docid": "0158d90036d675c31f5634bff5202605", "text": "Regardless of how it exactly impacts the credit score, the question is does it help improve your credit situation? If the score does go up, but it goes up slowly that was a lot of effort to retard credit score growth. Learning to use a credit card wisely will help you become more financially mature. Start to use the card for a class of purchases: groceries, gas, restaurants. Pick one that won't overwhelm your finances if you lose track of the exact amount you have been charging. You can also use it to pay some utilities or other monthly expenses automatically. As you use the card more often, and you don't overuse it, the credit card company will generally raise your credit limit. This will then help you because that will drop your utilization ratio. Just repeat the process by adding another class of charges to you credit card usage. This expanded use of credit will in the long run help your score. The online systems allow you to see every day what your balance is, thus minimizing surprises.", "title": "" }, { "docid": "f95bc581a3d4e6fe834469a1a551bbe3", "text": "\"It is a legitimate practice. The dealers do get the loan money \"\"up front\"\" because they're not holding the loan themselves; they promptly sell it to someone else or (more commonly) just act as salesmen for a lending institution and take their profit as commission or origination fees. The combined deal is often not a good choice for the consumer, though. Remember that the dealer's goal is to close a sale with maximum profit. If they're offering to drop the price $2k, they either didn't expect to actually get that price in the first place, or expect at least $2k of profit from the loan, or some combination of these. Standard advice is to negotiate price, loan, and trade-in separately. First get the dealer's best price on the car, compare it to other dealer and other cars, and walk away if you don't like their offer. Repeat for the loan, checking the dealer's offer against banks/credit unions available to you. If you have an older car to unload, get quotes for it and consider whether you might do better selling it yourself. ========= Standard unsolicited plug for Consumef Reports' \"\"car facts\"\" service, if you're buying a new car (which isn't usually the best option; late-model used is generally a better value). For a small fee, they can tell you what the dealer's real cost of a car is, after all the hidden incentives and rebates. That lets you negotiate directly on how much profit they need on this sale... and focuses their attention on the fact that the time they spend haggling with you is time they could be using to sell the next one. Simply walking into the dealer with this printout in your hand cuts out a lot of nonsense. The one time I bought new, I basically walked in and said \"\"It's the end of the model year. I'll give you $500 profit to take one of those off your hands before the new ones come in, if you've got one configured the way I want it.\"\" Closed the deal on the spot; the only concession I had to make was on color. It doesn't always work; some salesmen are idiots. In that case you walk away and try another dealer. (I am not affiliated in any way with CU or the automotive or lending industries, except as customer. And, yes, this touch keyboard is typo-prone.)\"", "title": "" }, { "docid": "e3c30faa6ac6413950fd269befe2b073", "text": "Absolutely do not pay off the car if you aren't planning to keep it. The amount of equity that you have from a trade in vehicle will always be a variable when negotiating a new car purchase. By applying cash (a hard asset) to increase your equity, you are trading a fixed amount for an unknown, variable amount. You are also moving from a position of more certainty for a position of less certainty. You gain nothing by paying off the car, whereas the dealer can negotiate away a larger piece of the equity in the vehicle.", "title": "" }, { "docid": "4e06efe68d1148e56aec06819ef59e0a", "text": "The amount you are earning in the savings account is insignificant, since you would only have the money in the account for 1 month after purchasing the car. The instant 1.5% cashback (or travel mile reward), on the other hand, can be significant. However, it is not normal for a car dealership to allow you to put $16k on a credit card. The reason is that the fees that the dealer has to pay to process your credit card would be too burdensome. Car dealers have a much smaller profit margin on their sales than a typical retail store, so if the dealer has to pay 3 or 4% of the sales price in credit card fees, it just eats up too much of their profit. If the dealer does allow you to put the entire purchase price on a credit card, be aware that they have already factored in their processing fees into the price. You might be able to get a better than 1.5% discount by offering to pay with cash instead.", "title": "" }, { "docid": "9fdc4efbcfddc3f31cecd99cf187ecf3", "text": "The fluctuation of interest rates during the next year could easily dwarf the savings this attempt to improve your credit score will have; or the reverse is true. Will the loan improve your score enough to make a difference? It will not change the number of months old your oldest account is. It will increase the breadth of your accounts. Applying for the car loan will result in a short term decrease in the score because of the hard pull. The total impact will be harder to predict. A few points either way will generally not have an impact on your rate. You will also notice the two cores in your question differ by more than 30 points. You can't control which number the lender will use. You also have to realize the number differs every day depending on when they pull it that month. The addition of a car loan, assuming you still have the loan when you buy the house, will not have a major impact on your ability to get afford the home mortgage. The bank cares about two numbers regarding monthly payments: the amount of your mortgage including principal, interest, taxes and insurance; and the amount of all other debt payments: car loan, school loans, credit cards. The PITI number should be no more than 28%-33% of your monthly income; the other payments no more than 10%. If the auto loan payments fit in the 10% window, then the amount of money you can spend each month on the mortgage will not be impacted. If it is too large, then they will want to see a smaller amount of your income to go to PITI. If you buy the car, either by cash or by loan, after you apply for the mortgage they will be concerned because you are impacting directly numbers they are using to evaluate your financial health. I have experienced a delay because the buyer bought a car the week before closing. The biggest impact on your ability to get the loan is the greater than 20% down payment, Assuming you can still do that if you pay cash for the car. Don't deplete your savings to get to the 50% down payment level. Keep money for closing costs, moving expenses, furnishing, plus other emergencies. Make it clear that you can easily cover the 20% level, and are willing to go higher to make the loan numbers work.", "title": "" }, { "docid": "93cfc7f27a3b137773cb171345b602eb", "text": "I doubt it. If you have a good track record with your car loan, that will count for a lot more than the fact that you don't have it anymore. When you look for a house, your debt load will be lower without the car loan, which may help you get the mortgage you want. Just keep paying your credit card bills on time and your credit rating will improve month by month.", "title": "" }, { "docid": "6ea3b8af7a6b041764f60802ed30c0f8", "text": "Is it really worth the interest you'd pay over a year for a relatively minor and temporary bump to your credit score? I mean, you just bought a car so I'm assuming you probably aren't looking for another loan in the near future.", "title": "" }, { "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": "846896e5f9c9e12678aa7d4b49272755", "text": "Credit scores have a huge financial impact on consumers, even though most people don’t know how they are calculated or which bad habits may be driving theirs down. Your credit score is a number on a scale of 300 to 900 that can affect all of your financial decisions, from shopping for groceries to applying for a mortgage. Read on to find out why a good credit rating is so important. 4 Things to Know About Your Credit Score Why it’s important. Throughout your life, you will probably rely on your credit to acquire the items that you want and need but can’t necessarily pay cash for. Each time you buy something on credit, merchants are taking a gamble on you; the bet is", "title": "" }, { "docid": "b3308e4c8f1bb1711105dc3cb749bb0b", "text": "Here's my take: 1) Having a car loan and paying it on time helps build credit. Not as much as having credit cards (and keeping them paid or carrying balance just enough to be reported and then paying it), but it counts. 2) Can't you set in your bank, not the lender, something to pay the car automagically for you? Then you will be paying it on time without having to think on it. 3) As others said, do read the fine print.", "title": "" }, { "docid": "8cc41e5f9dfa3cd2344fc7977f6f5230", "text": "There are several factors here. Firstly, there's opportunity cost, i.e. what you would get with the money elsewhere. If you have higher interest opportunities (investing, paying down debt) elsewhere, you could be paying that down instead. There's also domino effects: by reducing your liquid savings to or below the minimum, you can't move any of it into tax advantaged retirement accounts earning higher interest. Then there's the insurance costs. You are required to buy extra insurance to protect your lender. You should factor in the extra insurance you would buy vs the insurance required. Given that you can buy the car yourself, catastrophic insurance may not be necessary, or you may prefer a higher deductible than your lender will allow. If you're not sufficiently capitalized, you may need gap insurance to cover when your car depreciates faster than your loan is paid down. A 30 percent payment should be enough to not need it though. Finally, there's some value in having options. If you have the loan and the cash, you can likely pay it off without penalty. But it will be harder to get the loan if you don't finance it. Maybe you can take out a loan against the car later, but I haven't looked into the fees that might incur. If it's any help, I'm in the last stretch of a 3 year car loan. At the time paying in cash wasn't an option, and having done it I recognize that it's more complicated than it seems.", "title": "" }, { "docid": "8925ab0df8b02394d0ed93e6f18cffd6", "text": "I have a few debts in collection. I do not care, I make very good money now, but I prefer to spend it on nice cars instead. In US after 7 years they do not affect your credit score. On the contrary, if you pay them they can ding your credit. That's what Susie Orman show says as well -- there is absolutely no point paying a debt that is more than 7 years old.", "title": "" }, { "docid": "badf3c449404b6371b976778d8326a42", "text": "You should not seek a kind of debt just for it's appearance on your credit report. If you don't need an auto loan don't get an auto loan. Getting a credit card for the purpose of building credit is a little bit of a different animal because you can use a credit card such that you never pay any interest or fees. With a loan, you will pay interest. Altering your score by paying interest doesn't provide you with a net benefit. With that said, depending on the auto loan rate you may want to accept the loan just to fee up your capital. Some promotional rates are so low you may even make money leaving the cash in a regular savings account. But don't let your credit score wag the dog.", "title": "" } ]	fiqa
3ed7b94484ff3a67572aa6441fdb9bdd	What's the best online tool that can track my entire portfolio including gains/losses?	[ { "docid": "38bdbd4c2225ed3344f2d36eb24aa6d8", "text": "You can use a tool like WikiInvest the advantage being it can pull data from most brokerages and you don't have to enter them manually. I do not know how well it handles dividends though.", "title": "" }, { "docid": "94c2b0c5d718b73fc598879131d2e8ee", "text": "\"Mint.com does this quite well. The graph views of your budgets, investments, debts, and other aspects of your financial life can be shown in gestalt, or on a per-account basis (at least, it does for me). See the investment \"\"how it works\"\" page for more information. \"\"Find out whether you're beating the market–or it's beating you. Compare your portfolio to market benchmarks, and instantly see your asset allocation across all your investment accounts: 401k, mutual funds, brokerage accounts, even IRAs.\"\"\"", "title": "" }, { "docid": "20f359098fd69ea33661b6f8f5533514", "text": "Google Portfolio does the job: https://www.google.com/finance/portfolio You can add transaction data, view fundamentals and much more.", "title": "" } ]	[ { "docid": "a5d349fd25625befc14104455f8caec1", "text": "I have ScottradeElite on my desktop. I have played around with it but no longer use it. The transactions that I make through Scottrade are more dependent on my goals for the securities than what the market is doing at the moment. Keep in mind that there will always be others out there with better access to price changes than you. They also will have better hardware. We cannot beat them at their game.", "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": "58508326ca40b024e9d896173d8c4094", "text": "Take a look at this: http://code.google.com/p/stock-portfolio-manager/ It is an open source project aimed to manage your stock portfolio.", "title": "" }, { "docid": "9b303954acf188426116b459d9b2a890", "text": "\"Back-testing itself is flawed. \"\"Past performance is no guarantee of future results\"\" is an important lesson to understand. Market strategies of one kind or another work until they don't. Edited in -- AssetPlay.net provides a tool that's halfway to what you are looking for. It only goes back to 1972, however. Just to try it, I compared 100% S&P to a 60/40 blend of S&P with 5 yr t-bills (a misnamed asset, 5 yr treasuries are 'notes' not 'bills') I found the mix actually had a better return with lower volatility. Now, can I count on that to work moving forward? Rates fell during most of this entire period so bonds/notes both looked pretty good. This is my point regarding the backtest concept. GeniusTrader appears more sophisticated, but command line work on PCs is beyond me. It may be worth a look for you, JP. ETF Replay appears to be another backtest tool. It has its drawbacks, however, (ETFs only)\"", "title": "" }, { "docid": "baeda48ad38b88a95a6cbfd626419096", "text": "I've looked into Thinkorswim; my father uses it. Although better than eTrade, it wasn't quite what I was looking for. Interactive Brokers is a name I had heard a long time ago but forgotten. Thank you for that, it seems to be just what I need.", "title": "" }, { "docid": "3dccc75bc4b29bf2cb80a8c9dff15b95", "text": "\"My answer is Microsoft Excel. Google \"\"VBA for dummies\"\" (seriously) and find out if your brokerage offers an 'API'. With a brief understanding of coding you can get a spreadsheet that is live connected to your brokers data stream. Say you have a spreadsheet with the 1990 value of each in the first two columns (cells a1 and b1). Maybe this formula could be the third column, it'll tell you how much to buy or sell to rebalance them. then to iterate the rebalance, set both a2 and b2 to =C1 and drag the formula through row 25, one row for each year. It'll probably be a little more work than that, but you get the idea.\"", "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": "77910cb1a35f144cf084c07e12dd9ba9", "text": "I am mostly interested in day to day records, and would like the data to contain information such as dividend payouts, and other parameters commonly available, such as on : http://finviz.com/screener.ashx ... but the kind of queries you can do is limited. For instance you can only go back two years.", "title": "" }, { "docid": "101a9c97a94a00238daeb111a94202b4", "text": "\"You don't need to use a real stock like GLD. You can just create a \"\"stock\"\" called something like \"\"1 oz Gold\"\" and buy and sell them as if they were shares. It won't auto-update the price like GLD, but that's not a big deal to update manually once a month or so. I prefer to have accurate data that is correct at a particular point in time to having data that is 2-3% off, or that requires entering the ounces as 10x reality. YMMV. This is very similar to how you track US Savings Bonds in Quicken (and might be described in the help under that topic.)\"", "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": "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": "500aba91d79281094dbadba775df5b7a", "text": "I'm using iBank on my Mac here and that definitely supports different currencies and is also supposed to be able to track investments (I haven't used it to track investments yet, hence the 'supposed to' caveat).", "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": "cce033f385da61f67b0c492443451b1d", "text": "\"It's easy for me to look at an IRA, no deposits or withdrawal in a year, and compare the return to some index. Once you start adding transactions, not so easy. Here's a method that answers your goal as closely as I can offer: SPY goes back to 1993. It's the most quoted EFT that replicates the S&P 500, and you specifically asked to compare how the investment would have gone if you were in such a fund. This is an important distinction, as I don't have to adjust for its .09% expense, as you would have been subject to it in this fund. Simply go to Yahoo, and start with the historical prices. Easy to do this on a spreadsheet. I'll assume you can find all your purchases inc dates & dollars invested. Look these up and treat those dollars as purchases of SPY. Once the list is done, go back and look up the dividends, issues quarterly, and on the dividend date, add the shares it would purchase based on that day's price. Of course, any withdrawals get accounted for the same way, take out the number of SPY shares it would have bought. Remember to include the commission on SPY, whatever your broker charges. If I've missed something, I'm sure we'll see someone point that out, I'd be happy to edit that in, to make this wiki-worthy. Edit - due to the nature of comments and the inability to edit, I'm adding this here. Perhaps I'm reading the question too pedantically, perhaps not. I'm reading it as \"\"if instead of doing whatever I did, I invested in an S&P index fund, how would I have performed?\"\" To measure one's return against a benchmark, the mechanics of the benchmarks calculation are not needed. In a comment I offer an example - if there were an ETF based on some type of black-box investing for which the investments were not disclosed at all, only day's end pricing, my answer above still applies exactly. The validity of such comparisons is a different question, but the fact that the formulation of the EFT doesn't come into play remains. In my comment below which I removed I hypothesized an ETF name, not intending it to come off as sarcastic. For the record, if one wishes to start JoesETF, I'm ok with it.\"", "title": "" }, { "docid": "44e7a7cb513b863434091609d159ded7", "text": "I'm responsible for all our hedging. Since we sell the energy to end users we do mostly fixed buys, swaps and calls. I'm a excel guru and dabble a little in SQL. we have Crystal Ball as well but i have no idea how to use it. I guess I'm trying to figure out if there is a tool that people use to help me analyze the spreads. or perhaps some reading material to help me through this. This is what i've been working towards for so long and i really don't want to fuck this up", "title": "" } ]	fiqa
bb6b5fb030b372f6b5078bed43a813b2	Multiple hard inquiry for a single loan from car dealer?	[ { "docid": "7f63a2ebb0d599a7f156513c061b8228", "text": "\"(I'm a bit surprised that nobody talked about the impact of multiple inquiries on a loan, since OP is concerned with credit building. Probably an answer as opposed to a comment is justified.) Yes. In fact when you shop for auto loan you are expected to have your credit score/report be pulled by different banks, credit unions, and/or the financing arm of the car manufacturer or the dealership, so that you can hopefully get the best rate possible. This is especially true if the dealer is requesting quotes on rates on your behalf, as they would probably use a batch process to send out applications to multiple financial institutions all at once. Yes, and a bit unusual - CALVERT TOYO (your dealer) pulled your report twice on the same day. Presumably they are not getting any new information on the second pull. Maybe a fat finger? Regardless, you should not worry about this too much (to be explained below). I would say \"\"don't bother\"\". The idea behind hard inquiries lowering credit score is that lenders see the number of hard inquiries as your desire for credit. Too high a number is often viewed as either \"\"desperate for credit\"\" or \"\"unable to qualify for credit\"\". But as explained above, it is very common for a person to request quotes for multiple financial institutions and thus to have multiple hard inquiries in a short period of time when shopping for loans. To account for that, the credit bureau's model would usually combine hard inquiries for a same type of loan (auto, mortgage, etc.) within 30 days. Hence a person sending quote request to 3 banks won't be rated higher for credit than if he were to request quotes from 5 banks. Therefore in your case your credit profile is not going to be different if you had been pulled just once. my credit score goes down for 15 points I'm assuming you are talking about the credit score provided by Credit Karma. The score CK provided is FAKO. The score lenders care about is FICO. They are well correlated but still different. Google these two terms and you should be able to figure out the difference quickly. You can also refer to my answer to a different question here: Equifax credit score discrepancy in 1 month, why?\"", "title": "" }, { "docid": "9654bea102f4b7d56d91111f737d8cde", "text": "Each goes to a different agency. Yes, it is normal that the lender queries more than one agency.", "title": "" }, { "docid": "6a82a58202ec394a50a1b5aa8ce2f7f3", "text": "This is normal with the dealer's financing. To add more details to littleadv's answer, what happens is when you get the financing through the dealer, at first, they will try to do the loan on your behalf with local banks in your area. This is why you see several hard inquiries; one from each back. If none of these banks wants to take the loan, then dealer's financing entity will take the loan. This was my exact experience with Hyundai. In addition, don't get surprise if you start receiving letters saying that your loan was rejected. The dealer will send the loan requests simultaneously, and some of the banks might deny the loan. This also happened to me, and I have been owning my car for around a year. Still, make sure that the letters matches with the credit inquiries.", "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": "230bf99815c0f1b4b3d8aea5c08f2c0f", "text": "The car dealership doesn't care where you get the cash; they care about it becoming their money immediately and with no risk or complications. Any loan or other arrangements you make to raise the cash is Your Problem, not theirs, unless you arrange the loan through them.", "title": "" }, { "docid": "1add9a666c8b481d0ddcca7928f6e38c", "text": "\"Were you just offered a car loan for 1.4%, or did you sign for a car loan for 1.4%? If you signed, it's too late. If you didn't sign: You should realise that your car loan isn't really 1.4%. Nobody will give you a car loan for less than a mortgage loan. What really happened is that you gave up your chance to get a rebate on the car purchase. A car worth $18,000 will have a price tag of $20,000. You can buy it for cash and haggle the dealer down to $18,000, or you can take that \"\"cheap\"\" 1.4% loan and pay $20,000 for the car. So if at all possible, you would try to get a cheap loan from your bank, possibly through your mortgage, so you can buy the car without taking a loan from the car dealer.\"", "title": "" }, { "docid": "b10a6a9f11ddd5e980624a5df4c0c0f8", "text": "Car dealers as well as boat dealers, RV dealers, maybe farm vehicle dealers and other asset types make deals with banks and finance companies to they can make loans to buyers. They may be paying the interest to the finance companies so they can offer a 0% loan to the retail customer for all or part of the loan term. Neither the finance company nor the dealer wants to make such loans to people who are likely to default. Such customers will not be offered this kind of financing. But remember too that these loans are secured by the asset - the car - which is also insured. But the dealer or the finance company holds that asset as collateral that they can seize to repay the loan. So the finance company gets paid off and the dealer keeps the profit he made selling the car. So these loans are designed to ensure the dealer nor the finance company looses much. These are called asset finance loans because there is always an asset (the car) to use as collateral.", "title": "" }, { "docid": "58543b29e1af5f251960eed3c0cb0e77", "text": "On the surface this sounds ridiculous, which makes me suspect that there might be something that the dealer intends to cling on to; otherwise it sounds like the dealer should be ashamed to even call your son about its own incompetence. I'd recommend politely refusing the request since said mistake didn't happen on your end, and wait to see if the dealer comes back with some sort of argument.", "title": "" }, { "docid": "8811d8cab56c747f24cd117c28f2fca7", "text": "\"Those two hard inquiries will only count as one on your score because you applied for the two cards immediately one after the other. Credit bureaus see this as just credit card shopping, so will hit your score only once as a single hard inquiry. If you had applied for these two cards days apart, then your score would have been hit with two hard inquiries. Find more details here, specifically under the \"\"What to know about rate shopping\"\" section.\"", "title": "" }, { "docid": "d2aa9ba776cab68fb9f0bd1333bbea3b", "text": "\"You can find out the most money they will loan you for a car loan when you approach your current bank/credit union. They should be willing to layout options based on your income, and credit history. You then have to decide if those terms work for you. There are several dangers with getting loan estimates, they may be willing to lend you more than you can actually handle. They think you can afford it, but maybe you can't. They may also have a loan with a longer term, which does bring the monthly cost down, but exposes you to being upside down on the loan. You then use this a a data point when looking at other lenders. The last place you look is the auto dealer. They will be trying to pressure you on both the loan and the price, that is not the time to do doing complex mental calculations. The Suntrust web page was interesting, it included the quote: The lowest rate in each range is for LightStream's unsecured auto loan product and requires that you have an excellent credit profile. It also induced the example the rate of 2.19% - 4.24% for a 24 to 36 month loan of $10,000 to $24,999 for a used car purchased from a dealer. Also note that my local credit union has a new/used loan at 1.49%, but you have to be a member. Sunstrust seems to be in the minority. In general a loan for X$ and y months will have a lower rate if it is secured with collateral. But Suntrust is offering unsecured loans (i.e. no collateral) at a low rate. The big benefit for their product is that you get the cash today. You can get the cash before you know what you want to buy. You get the cash before you have negotiated with the dealer. That makes that step easier. Now will they in the near future ask for proof you bought a car with the money? no idea. If you went to the same web page and wanted a debt consolidation loan the rate for the same $ range and the same months is: 5.49% - 11.24% the quote now changes to: The lowest rate in each range requires that you have an excellent credit profile. I have no idea what rate they will actually approve you for. It is possible that if you don't have excellent credit the rate rises quickly, but 4.24% for the worst auto loan is better than 5.49% for the best debt consolidation. Excellent Credit Given the unique nature of each individual’s credit situation, LightStream believes there is no single definition for \"\"excellent credit\"\". However, we find individuals with excellent credit usually share the following characteristics: Finally, it should be noted again that each individual situation is different and that we make our credit judgment based on the specific facts of that situation. Ultimately our determination of excellent credit is based on whether we conclude that there is a very high likelihood that our loan will be repaid in a full and timely manner. All the rates mentioned in this answer are from 15 July 2017.\"", "title": "" }, { "docid": "beb3f083af599d46d40746bcc6f23dda", "text": "\"I think everything in your case is just simply missing one important rule of how credit works. Essentially, your MIL cannot get a loan. You can. You are making her a large loan that she cannot get for herself. That is all. That is the essence of what this deal is. It is not without interest - she makes a financial contribution toward your son, you get the deal in 2 years assuming she doesn't default (she will), etc. Imagine it this way: you are sitting in the dealership with the dealer and your MIL. She wants a loan to pay for the car. The dealership says, \"\"you are way not credit worthy.\"\" So your MIL says, \"\"why doesn't my son-in-law take out the loan instead?\"\" Now the dealership says, sure, that's fine. From the dealer's standpoint, every other part of your arrangement is irrelevant - boring, even. The only magic trick is in who takes the loan out, no other difference. You're letting your MIL pull a car out of her sleeve like a magician, and in taking the deal you're believing her. This sentence: I am pretty sure that the ex-MIL will not let me down (I've loaned her large sums of money before and she always promptly repaid). is everything. You're making a rather large bet that the things that can go wrong in two years - including any situation involving your wife's welfare - are rather miniscule. And furthermore, that the few times she's paid you back - that did NOT convince banks and dealer she is more creditworthy - justifies her good creditworthiness. Is the interest worth it? Do you really believe that your MIL needs to wring a car out of you before she would consider contributing to her grandson's well-being (which is, essentially, the interest)? But wait, it's NOT everything. Her daughter (my ex-wife) would drive it for 2 years and then turn the car over to our son. Even if your MIL is creditworthy, the woman you described as follows: Her daughter, though, is a loose cannon. Will be holding and returning the collateral in this deal. Things she can do include: So I'm arguing two points: Obviously my opinion on this is clear. I hope I did a decent job of explaining where the components of this deal (credit, interest, collateral) play out in the eyes of a dealer or bank, and get lost in the mechanics of the rules you worked out with your family.\"", "title": "" }, { "docid": "78c7b2bf71f314407d951a11d5e096fb", "text": "\"It's possible the $16,000 was for more than the car. Perhaps extras were added on at purchase time; or perhaps they were folded into the retail price of the car. Here's an example. 2014: I'm ready to buy. My 3-year-old trade-in originally cost $15,000, and I financed it for 6 years and still owe $6500. It has lots of miles and excess wear, so fair blue-book is $4500. I'm \"\"upside down\"\" by $2000, meaning I'd have to pay $2000 cash just to walk away from the car. I'll never have that, because I'm not a saver. So how can we get you in a new car today? Dealer says \"\"If you pay the full $15,000 retail price plus $1000 of worthless dealer add-ons like wax undercoat (instead of the common discounted $14,000 price), I'll eat your $2000 loss on the trade.\"\" All gets folded into my new car financing. It's magic! (actually it's called rollover.) 2017: I'm getting itchy to trade up, and doggone it, I'm upside down on this car. Why does this keep happening to me? In this case, it's rollover and other add-ons, combined with too-long car loans (6 year), combined with excessive mileage and wear on the vehicle.\"", "title": "" }, { "docid": "c9ce1b041cc3e4f4463bf2f83a21f155", "text": "In the U.S., most car dealers provide lease financing through one company (usually a subsidiary of the auto manufacturer). Whereas they provide loan financing through a variety of companies, some of whom offer very high interest rate loans and sell the loans as collateralized debt obligations (CDOs). Have you checked whether Chase or First Tech Credit Union offers a suitable car lease?", "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": "67525a00d56b3e4c7396761c4f96f362", "text": "Either approach will put a strain on your friendship, unless you are willing to treat it as a gift which may or may not be returned rather than a loan. I agree that paying it direct to the dealer (or giving her a check that is made out to the dealer) avoids the risk of the money getting sidetracked.", "title": "" }, { "docid": "254c020807418d441f950c780a5fdfb7", "text": "The loan agent surely knows that having a combination of loans greater than the value of the property (less some margin) is illegal, but also impossible. Your first mortgage, mechanic's liens, tax liens, and so forth are a matter of public record. In most states the records can be viewed online, by anyone, for free. The title search prerequisite for getting the second mortgage looks beyond the low hanging fruit for things like aborigines claims for parcels of land that include your property. The loan agent is trying to sell you a home equity line of credit. Almost everyone gets one after building up some equity. There's often no closing cost and it's not necessary to ever use it. Keep it for emergencies.", "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": "632a0ece15cf3dadbd5fe45fd5f93376", "text": "You have a few options and sometimes challenges help us improve our situation. First, you can not borrow to buy a car. Reducing the massive depreciation that cars undergo will help you be wealthier. It is hard to find a good use car that you can buy for cash, but it will play out best for your finances in the long run. If your heart is set on borrowing, I would encourage you to go to the bank/credit union where you have your checking account. They will see your history of deposits and may grant you a loan based on that. Also you are likely to get a better deal from the bank than from the car dealer. Thirdly, you can simply go to your employer's HR department and ask them. Surely someone has applied for a loan during the company's history. What did they do for them?", "title": "" } ]	fiqa
bf8b8051b68732f942016e4d1cef73f3	I can't produce a title for a vehicle I just traded	[ { "docid": "ccaf4e379ae155f8f1ddd2d94784a9e7", "text": "The old truck is collateral for a loan. The place that made the loan expects that if you can't pay they can repossess that old truck. If you sell it they can't repossess it. The dealer needs clean title to be able to buy the truck from you, so they can fix up the truck and sell it to somebody else. I am assuming the the lender has filed paperwork with the state to show their lien on the title. Your options are three: As to option 2: If the deal still makes sense the new car dealer can send the $9,000 to the lender that you forgot about. That will of course increase the amount of money you have to borrow. You will also run into the problem that this loan that you forgot to mention on your credit application may cause them to rethink the decision to loan you the money.", "title": "" }, { "docid": "813d265b6ff1493bf509136ff753c95f", "text": "\"If your fiancée took a title loan out on your truck you won't be able to trade it in for another vehicle until you pay the loan. The dealer will likely take your \"\"slightly newer\"\" truck back because you won't be able to produce the title for the trade until the other debt is settled. Title loans are a terrible idea. You should probably try to pay that loan off as quickly as possible regardless, because interest rates are terrible on these loans. I will update this answer if you add details about the circumstances of the current loan on your truck.\"", "title": "" } ]	[ { "docid": "98a515cbd0567da8e4039af7b5522f27", "text": "That's tricky, actually. First, as the section 1015 that you've referred to in your other question says - you take the lowest of the fair market value or the actual donor basis. Why is it important? Consider these examples: So, if the relative bought you a brand new car and you're the first title holder (i.e.: the relative paid, but the car was registered directly to you) - you can argue that the basis is the actual money paid. In essence you got a money gift that you used to purchase the car. If however the relative bought the car, took the title, and then drove it 5 miles to your house and signed the title over to you - the IRS can argue that the car basis is the FMV, which is lower because it is now a used car that you got. You're the second owner. That may be a significant difference, just by driving off the lot, the car can lose 10-15% of its value. If you got a car that's used, and the donor gives it to you - your basis is the fair market value (unless its higher than the donor's basis - in which case you get the donor's basis). You always get the lowest basis for losses (and depreciation is akin to a loss). Now consider the situation when your relative is a business owner and used the car for business. He didn't take the depreciation, but he was entitled to. IRS can argue that the fact that he didn't take is irrelevant and reduce the donor's basis by the allowable depreciation. That may bring your loss basis to below the FMV. I suggest you take it to a tax professional licensed in your state who will check all the facts and circumstances of your situation. Your relative might be slapped with a gift tax as well, if the car FMV is above certain amount (currently the exemption is $14000).", "title": "" }, { "docid": "1cf24b5d8cfb72fb8f040d7974afa9d5", "text": "I have sold cars before to individuals and always just received cash. I would think as long as the amount is less than $10,000.00 and the buyer is serious they will get there with the cash. Of course there is no possible way to guarantee the cash will not be counterfeit.", "title": "" }, { "docid": "168704f710afdf153cf1d910d90c06eb", "text": "\"You can greatly reduce the risk if you can line up a buyer prior to purchasing the car. That kind of thing is common in business, one example is drop shipping. Also there are sales companies that specialize in these kinds of things bringing manufacturers of goods together with customers. The sales companies never take delivery of the product, just a commission on the sales. From this the manufacturers are served as they have gained a customer for their goods. The buying company is served as they can make a \"\"better\"\" end product. The two parties may have not been brought together had it not been for the sales company so on some level both are happy to pay for the service. Can you find market inequalities and profit from them? Sure. I missed a great opportunity recently. I purchased a name brand shirt from a discount store for $20. Those shirts typically sell on ebay for $80. I should have cleaned out that store's inventory, and I bet someone else did as by the time I went back they were gone. That kind of thing was almost risk-less because if the shirts did not sell, I could simply return them for the full purchase price. That and I can afford to buy a few hundred dollars worth of shirts. Can you afford to float 45K CDN? What if it takes a year to sell the car? What if the economy goes sour and you are left \"\"holding the bag\"\"? Why are not car dealers doing exactly what you propose? Here in the US this type of thing is called \"\"horse trading\"\" and is very common. I've both lost and made money on these kind of deals. I would never put a significant amount of my net worth at risk.\"", "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": "2a44e8cbf7e4a965cdc2a692b9e07023", "text": "\"As others have said, if the dealer accepted payment and signed over ownership of the vehicle, that's a completed transaction. While there may or may not be a \"\"cooling-off period\"\" in your local laws, those protect the purchaser, not (as far as I know) the seller. The auto dealer could have avoided this by selling for a fixed price. Instead, they chose to negotiate every sale. Having done so, it's entirely their responsibility to check that they are happy with their final agreement. Failing to do so is going to cost someone their commission on the sale, but that's not the buyer's responsibility. They certainly wouldn't let you off the hook if the final price was higher than you had previously agreed to. He who lives by the fine print shall die by the fine print. This is one of the reasons there is huge turnover in auto sales staff; few of them are really good at the job. If you want to be kind to the guy you could give him the chance to sell you something else. Or perhaps even offer him a $100 tip. But assuming the description is correct, and assuming local law doesn't say otherwise (if in any doubt, ask a lawyer!!!), I don't think you have any remaining obligation toward them On the other hand, depending on how they react to this statement, you might want to avoid their service department, just in case someone is unreasonably stupid and tries to make up the difference that was.\"", "title": "" }, { "docid": "2c91d469adaf30cb4392e92342f5ad50", "text": "\"Unfortunately, it's not unusual enough. If you're looking for a popular car and the dealer wants to make sure they aren't holding onto inventory without a guarantee for sale, then it's a not completely unreasonable request. You'll want to make sure that the deposit is on credit card, not cash or check, so you can dispute if an issue arises. Really though, most dealers don't do this, requiring a deposit, pre sale is usually one of those hardball negotiating tactics where the dealer wrangles you into a deal, even if they don't have a good deal to make. Dealers may tell you that you can't get your deposit back, even if they don't have the car you agreed on or the deal they agreed to. You do have a right for your deposit back if you haven't completed the transaction, but it can be difficult if they don't want to give you your money back. The dealer doesn't ever \"\"not know if they have that specific vehicle in stock\"\". The dealer keeps comprehensive searchable records for every vehicle, it's good for sales and it's required for tax records. Even when they didn't use computers for all this, the entire inventory is a log book or phone call away. In my opinion, I would never exchange anything with the dealer without a car actually attached to the deal. I'd put down a deposit on a car transfer if I were handed a VIN and verified that it had all the exact options that we agreed upon, and even then I'd be very cautious about the condition.\"", "title": "" }, { "docid": "5b2e1f0f7bd0926fa89271b2305f03c8", "text": "Draft up a promissory notes. Have a lawyer do it use one of those online contract places if you have simple needs. Your promissory note need to cover Be specific. There are probably a lot more items that can be included, and if a quick internet search is any indication it gets deep fast. http://lmbtfy.com/?q=car+sale+promissory+note (Like @LittleAdv says) Head to your DMV with the title and the promissory note. The title is signed over to you and held by the DMV. When you pay up, the seller informs the DMV and they send you the title. If you don't pay up, the seller can legally repossess the car. All butts are covered. Pay the note as agreed. When you are all paid up, your friend notifies the DMV who then mail you the title. Your butt is covered because your name is on the car, you can insure it and nobody can take it from you (legally) if you are paying the note as agreed. Your pal's butt is covered because if you stop paying half way through, he can keep whatever you have paid him and get his car back.", "title": "" }, { "docid": "88ddcb0c6858f21c6a4571c616e9ba94", "text": "\"When I have stock at my brokerage account, the title is in street name - the brokerage's name and the quantity I own is on the books of the brokerage (insured by SIPC, etc). The brokerage loans \"\"my\"\" shares to a short seller and is happy to facilitate trades in both directions for commissions (it's a nice trick to get other parties to hold the inventory while you reap income from the churn); by selecting the account I have I don't get to choose to not loan out the shares.\"", "title": "" }, { "docid": "0e56536646a6bb78b874992c3447e0b7", "text": "Thanks for your reply. I’m not familiar with the term “Held-For-Trading Security”. My securities are generally held as collateral against my shorts. To clarify, I am just trying to track the “money in” and “money out” entries in my account for the shorts I write. The transaction is relatively straight forward, except there is a ton of information attached! In simple terms, for the ticker CSR and short contract CSRUQ8, the relevant entries look something like this: There are no entries for expiries. I need to ensure that funds are available for future margin calls and assignments. The sale side using covered calls is as involved.", "title": "" }, { "docid": "58543b29e1af5f251960eed3c0cb0e77", "text": "On the surface this sounds ridiculous, which makes me suspect that there might be something that the dealer intends to cling on to; otherwise it sounds like the dealer should be ashamed to even call your son about its own incompetence. I'd recommend politely refusing the request since said mistake didn't happen on your end, and wait to see if the dealer comes back with some sort of argument.", "title": "" }, { "docid": "be4904f4285c1e302cbb7256d8baa7e9", "text": "\"Strangely enough, you have a wash sale, but, for the fact that you sold the shares and then more than 30 days passed, you can take the loss. I mistakenly used the phrase \"\"and ended the year with no shared of the stock\"\" elsewhere, and was corrected, as one can sell at a loss up to 12/31, and have until the end of January to create a wash condition. In your case, the facts in June combined with you ending the year with no shares removes any doubt, a wash sale, but one that's fully closed out. Note - while Vicky's answer is correct, it should go on to say that once the stock is not owned for 30 days, the wash sale loss is permitted.\"", "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": "" }, { "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": "bf3c52ae294bd1bbf9893e00073baa4d", "text": "Securities or quite a few negotiable instruments can change title of ownership without any issue. Many at times the owner ship in implicit if you are holding a certain instrument. So for example in Stock its a fractional ownership in a company, this ownership transfers to the buyer from the seller without requiring any permission from the company. In case of say Loans, One cannot transfer the loan to some one else without the Banks permission.", "title": "" }, { "docid": "3ba8485a9a1a51d71b7d8c8b919e434f", "text": "A Standby Letter of Credit was required by a company in UAE to import Gold Dust from a supplier in South Africa, but they do not have enough cash flow to obtain the Standby LC from their Bank. They found Bronze Wing Trading & availed their required SBLC MT760 without any Financial Collateral.", "title": "" } ]	fiqa
87600a1aff476b599c93fd48309ffbb4	Evaluating an endowment policy for its fairness against other tax saving options in India such as PPF, EPF and even FDs	[ { "docid": "b8a3b2671830f2a8002f9dfbe2dd4b08", "text": "Or am missing something? Yes. The rate of 8.53 is illustration. There is no guarantee that the rate will be applicable. My yearly premium is Rs. 26289. On this amount I will save tax of Rs. 7887. So net premium is Rs. 18402. The other way to look at this is invest Rs 26289 [or actually less of Eq Term Deposit premium]. If you invest into Eq Term Deposit [lock-in for 6 years] with tax benefits, your numbers are going to be very different and definitely better than LIC returns. Edits:", "title": "" } ]	[ { "docid": "2c163002346e1c9b0d7922bbf4de10d4", "text": "I wrote about this a while back: http://blog.investraction.com/2006/10/mutual-funds-dividend-option-or-growth.html In short: Growth options of a mutual fund scheme don't pay out any money, they reinvest the dividend they receive. Dividend options pay out some money, at different intervals, based on the surplus they accumulate. In India, the options have very similar underlying portfolios, so HDFC Equity Fund (Growth) and HDFC Equity Fund (dividend) will have the same percentage allocation to each stock. Update: I also have a video you might want to see on the subject: http://www.youtube.com/watch?v=Bx8QtnccfZk", "title": "" }, { "docid": "76b55af2775772c8110da4c1f45acab8", "text": "Yeah, the VAT adds more fairness between who gets the taxes, but is only offset by it being more complicated and needing more bureaucracy. I think it's an interesting idea. If I were a policy analyst I'd like to see what costs are vs. benefit.", "title": "" }, { "docid": "2fd395e5610ec14ea4a6adbca57d1f7a", "text": "My understanding is that EWU (and EWUS) are both traded on US stock markets (NYSE & BATS), and as such these are not classified as PFIC. However, they do contain PFICs, so iShares takes the responsibility of handling the PFICs they contain and make adjustments in December. This contains the information about the adjustments made in 2016. https://www.ishares.com/us/literature/tax-information/pfic-2016.pdf On page 106 of the statement of the summary information they describe how they handle paying the necessary tax as an expense of the fund. https://www.ishares.com/us/library/stream-document?stream=reg&product=WEBXGBP&shareClass=NA&documentId=925898~926077~926112~1180071~1242912&iframeUrlOverride=%2Fus%2Fliterature%2Fsai%2Fsai-ishares-trust-8-31.pdf (I'm not a tax professional)", "title": "" }, { "docid": "3a7a6ec1313cb73c04f7e0e1ba797cb9", "text": "House rent allowance:7500 House Rent can be tax free to the extent [less of] Medical allowance : 800 Can be tax free, if you provide medical bills. Conveyance Allowance : 1250 Is tax free. Apart from this, if you invest in any of the tax saving instruments, i.e. Specified Fixed Deposits, NSC, PPF, EPF, Tution Fees, ELSS, Home Loan Principal etc, you can get upto Rs 150,000 deductions. Additional Rs 50,000 if you invest into NPS. If you have a home loan, upto Rs 200,000 in interest can be deducted. So essentially if you invest rightly you need not pay any tax on the current salary, apart from the Rs 200 professional tax deducted.", "title": "" }, { "docid": "82e4a219be65afcddb94527e7ceb52fb", "text": "\"What is a 403b? A 403(b) plan is a tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only US Tax Code 501(c)(3) organizations), cooperative hospital service organizations and self-employed ministers in the United States. Kind of a rare thing. A bit more here: http://www.sec.gov/investor/pubs/teacheroptions.htm under investment options Equity Indexed Annuities are a special type of contract between you and an insurance company. During the accumulation period — when you make either a lump sum payment or a series of payments — the insurance company credits you with a return that is based on changes in an equity index, such as the S&P 500 Composite Stock Price Index. The insurance company typically guarantees a minimum return. Guaranteed minimum return rates vary. After the accumulation period, the insurance company will make periodic payments to you under the terms of your contract, unless you choose to receive your contract value in a lump sum. For more information, please see our \"\"Fast Answer\"\" on Equity Indexed Annuities, and read FINRA's investor alert entitled Equity-Indexed Annuitiies — A Complex Choice. So perhaps \"\"equity indexed annuities\"\" is the more correct thing to search for and not \"\"insurance funds\"\"?\"", "title": "" }, { "docid": "141996ecd5b6a61868abb87b8a3326de", "text": "In my experiences most hedge funds won't have a benchmark in their mandate and are evaluated based upon absolute returns. Their benchmarks are generally cash + x basis points. So, no attribution and no IR. No experience at all with CTA's though, so not sure how things are there.", "title": "" }, { "docid": "f788ea32d519c84f38d354dad6476fe4", "text": "\"Highly Compensated Employee Rules Aim to Make 401k's Fair would be the piece that I suspect you are missing here. I remember hearing of this rule when I worked in the US and can understand why it exists. A key quote from the article: You wouldn't think the prospect of getting money from an employer would be nerve-wracking. But those jittery co-workers are highly compensated employees (HCEs) concerned that they will receive a refund of excess 401k contributions because their plan failed its discrimination test. A refund means they will owe more income tax for the current tax year. Geersk (a pseudonym), who is also an HCE, is in information services and manages the computers that process his firm's 401k plan. 401(k) - Wikipedia reference on this: To help ensure that companies extend their 401(k) plans to low-paid employees, an IRS rule limits the maximum deferral by the company's \"\"highly compensated\"\" employees, based on the average deferral by the company's non-highly compensated employees. If the less compensated employees are allowed to save more for retirement, then the executives are allowed to save more for retirement. This provision is enforced via \"\"non-discrimination testing\"\". Non-discrimination testing takes the deferral rates of \"\"highly compensated employees\"\" (HCEs) and compares them to non-highly compensated employees (NHCEs). An HCE in 2008 is defined as an employee with compensation of greater than $100,000 in 2007 or an employee that owned more than 5% of the business at any time during the year or the preceding year.[13] In addition to the $100,000 limit for determining HCEs, employers can elect to limit the top-paid group of employees to the top 20% of employees ranked by compensation.[13] That is for plans whose first day of the plan year is in calendar year 2007, we look to each employee's prior year gross compensation (also known as 'Medicare wages') and those who earned more than $100,000 are HCEs. Most testing done now in 2009 will be for the 2008 plan year and compare employees' 2007 plan year gross compensation to the $100,000 threshold for 2007 to determine who is HCE and who is a NHCE. The threshold was $110,000 in 2010 and it did not change for 2011. The average deferral percentage (ADP) of all HCEs, as a group, can be no more than 2 percentage points greater (or 125% of, whichever is more) than the NHCEs, as a group. This is known as the ADP test. When a plan fails the ADP test, it essentially has two options to come into compliance. It can have a return of excess done to the HCEs to bring their ADP to a lower, passing, level. Or it can process a \"\"qualified non-elective contribution\"\" (QNEC) to some or all of the NHCEs to raise their ADP to a passing level. The return of excess requires the plan to send a taxable distribution to the HCEs (or reclassify regular contributions as catch-up contributions subject to the annual catch-up limit for those HCEs over 50) by March 15 of the year following the failed test. A QNEC must be an immediately vested contribution. The annual contribution percentage (ACP) test is similarly performed but also includes employer matching and employee after-tax contributions. ACPs do not use the simple 2% threshold, and include other provisions which can allow the plan to \"\"shift\"\" excess passing rates from the ADP over to the ACP. A failed ACP test is likewise addressed through return of excess, or a QNEC or qualified match (QMAC). There are a number of \"\"safe harbor\"\" provisions that can allow a company to be exempted from the ADP test. This includes making a \"\"safe harbor\"\" employer contribution to employees' accounts. Safe harbor contributions can take the form of a match (generally totaling 4% of pay) or a non-elective profit sharing (totaling 3% of pay). Safe harbor 401(k) contributions must be 100% vested at all times with immediate eligibility for employees. There are other administrative requirements within the safe harbor, such as requiring the employer to notify all eligible employees of the opportunity to participate in the plan, and restricting the employer from suspending participants for any reason other than due to a hardship withdrawal.\"", "title": "" }, { "docid": "2102f925b4367dbf70ccd460f89ec49d", "text": "In the US the best way to solve the problem, IMHO, would be via a trust. Talk to a properly licensed trust/estate attorney and a tax adviser (EA/CPA licensed in your State). Using intermediary who's not a 501(c) organization may pose income tax issues to that intermediary as providing support to the needy is not a valid business expense. It may also pose gift tax issues, since the aggregate amounts may exceed the statutory exemption limits. Using a (non-revokable) trust you can avoid these issues, but others may come up (such as what to do with the trust income or undistributed moneys). Talk to the advisers about how to avoid them.", "title": "" }, { "docid": "a26f268a3b92b1128046db601adf0aeb", "text": "I believe you are talking about Public Provident Fund and National Savings Certificate schemes in India. PPF -> Deposit money -> If you want to take a loan after 3 years, you can take out 25% of the balance in your PPF account. NSC -> Money locked for 6 years and can only be encashed after 3 years, you cancel your deposit and encash all your money. Money is safe in both cases, because they are secured by the Indian government. But interest(8.75% at present for both in 2014-15 financial year) is compunded anually for PPF, but half yearly for NSC. So you get a higher interest rate in case of NSC. So if you can lock in your money, without any need for withdrawls, choose a NSC for higher returns. Tax rebate wise, both are same.", "title": "" }, { "docid": "b9e300e15d7fc0259b17bb812af02b9a", "text": "IRS Pub 561 says you have to use fair market value. You cannot simply use a depreciated value. You should attempt to determine what people normally pay for comparable items, and be prepared to defend your determination with evidence in the event of an audit.", "title": "" }, { "docid": "9c69713d90bd91bd6142580bd765e223", "text": "I would point this out to the committee or other entity in charge of handling this at work. They do have a fiduciary responsibility for the participant's money and should take anything reasonable seriously. The flip side to this is 95% of participants -- especially participants under 35 or so -- really pay next to no attention to this stuff. We consider it a victory to get people to pony up the matching contributions. Active participation in investment would blow our minds.", "title": "" }, { "docid": "0916ad38964a1bc54e7b332c0fc8eedc", "text": "If ordinary income tax rates and contribution rates to tax-advantaged retirement accounts are held constant, It's net negative to the extent that the average retirement account return exceeds the risk-free rate. Rather than pushing money into Roth accounts, the government could leave traditional 401(k)s unchanged, borrow the difference in up-front tax revenue that it's foregoing by doing so, and repay that debt as the tax revenue from traditional 401(k) disbursements comes in. Net of interest on the additional debt, the latter strategy would increase the government's total tax revenue by an amount proportional to the average excess return of the affected retirement accounts, with essentially no downside (other than messaging) relative to the strategy that's being proposed. Of course, in reality it's likely that retirement savings rates would decline as a result of the change, so that would partially offset the overall reduction in tax revenue. However, the downsides of reduced retirement savings rates arguably far outweigh that benefit. (That's why tax-advantaged retirement accounts exist in the first place.)", "title": "" }, { "docid": "0f370bf139ba17fef15ce4b63eea3f6f", "text": "Read this. https://www.irs.gov/retirement-plans/one-participant-401k-plans The example makes it very clear.", "title": "" }, { "docid": "2d7c1306a096acc1774eea91eaa277ca", "text": "Sorry, you cannot transfer EPF into PPF. The investments in PPF are limited to 150,000 per year. Withdrawal is in 7th year, i.e. After completion of 6 financial years. 50% of the Balance of 4th year can be withdrawn. 2.Withdraw the money and find a new form of investment. This is definitely possible. A lump sum investment into NPS [New Pension Scheme] or various Retirement schemes, or equity / real estate etc Is there any other 3rd solution for this situation? Keep the money AS-IS as the money will still continue to grow. The interest is stop getting accrued after 3 years of NO contribution. Within 36 months if an account will not get any deposit then it will be considered as dormant/inactive account. So you can wait for sometime before you decide to withdraw.", "title": "" }, { "docid": "a519077e8b48ef99b0d20e77a981deb0", "text": "Thank you fgunthar. I was not aware of ILWs, but I agree - this is also the closest thing I've found. As for starting a fund, I'm unfortunately nowhere near that point. But, my curiosity seems to inevitably lead me to obscure areas like ILWs.", "title": "" } ]	fiqa
8194a78bf1b4ca28d1399cb3a7737172	Good way to record currency conversion transactions in personal accounting software?	[ { "docid": "8568a818f3a0c4a7473017be99a53d48", "text": "\"I found an answer by Peter Selinger, in two articles, Tutorial on multiple currency accounting (June 2005, Jan 2011) and the accompanying Multiple currency accounting in GnuCash (June 2005, Feb 2007). Selinger embraces the currency neutrality I'm after. His method uses \"\"[a]n account that is denominated as a difference of multiple currencies... known as a currency trading account.\"\" Currency trading accounts show the gain or loss based on exchange rates at any moment. Apparently GnuCash 2.3.9 added support for multi-currency accounting. I haven't tried this myself. This feature is not enabled by default, and must be turned on explicity. To do so, check \"\"Use Trading Accounts\"\" under File -> Properties -> Accounts. This must be done on a per-file basis. Thanks to Mike Alexander, who implemented this feature in 2007, and worked for over 3 years to convince the GnuCash developers to include it. Older versions of GnuCash, such as 1.8.11, apparently had a feature called \"\"Currency Trading Accounts\"\", but they behaved differently than Selinger's method.\"", "title": "" }, { "docid": "ca5d202b93c164af5f61d58a5cd0aa01", "text": "Here's what the GnuCash documentation, 10.5 Tracking Currency Investments (How-To) has to say about bookkeeping for currency exchanges. Essentially, treat all currency conversions in a similar way to investment transactions. In addition to asset accounts to represent holdings in Currency A and Currency B, have an foreign exchange expenses account and a capital gains/losses account (for each currency, I would imagine). Represent each foreign exchange purchase as a three-way split: source currency debit, foreign exchange fee debit, and destination currency credit. Represent each foreign exchange sale as a five-way split: in addition to the receiving currency asset and the exchange fee expense, list the transaction profit in a capital gains account and have two splits against the asset account of the transaction being sold. My problems with this are: I don't know how the profit on a currency sale is calculated (since the amount need not be related to any counterpart currency purchase), and it seems asymmetrical. I'd welcome an answer that clarifies what the GnuCash documentation is trying to say in section 10.5.", "title": "" } ]	[ { "docid": "ea5c5652e7b5488b676fca707598ad9b", "text": "This started as a comment but then really go too long so I am posting an answer: @yarun, I am also using GnuCash just like you as a non-accountant. But I think it really pays off to get to know more about accounting via GnuCash; it is so useful and you learn a lot about this hundreds of years old double entry system that all accountants know. So start learning about 5 main accounts and debits and credits, imho. It is far easier than one can think. Now the answer: even without balancing amounts exactly program is very useful as you still can track your monthly outgoings very well. Just make/adjust some reports and save their configurations (so you can re-run quickly when new data comes in) after you have classified your transactions properly. If I still did not know what some transactions were (happens a lot at first import) - I just put them under Expenses:Unaccounted Expenses - thus you will be able to see how much money went who knows where. If later you learn what those transactions were - you still can move them to the right account and you will be pleased that your reports show less unaccounted money. How many transactions to import at first - for me half a year or a year is quite enough; once you start tracking regularly you accumulate more date and this becomes a non-issue. Reflecting that personal finance is more about behaviour than maths and that it is more for the future where your overview of money is useful. Gnucash wil learn from import to import what transactions go where - so you could import say 1 or 3 month intervals to start with instead of a while year. No matter what - I still glance at every transaction on import and still sometimes petrol expense lands in grocery (because of the same seller). But to spot things like that you use reports and if one month is abnormal you can drill down to transactions and learn/correct things. Note that reports are easy to modify and you can save the report configurations with names you can remember. They are saved on the machine you do the accounting - not within the gnucash file. So if you open the file (or mysql database) on another computer you will miss your custom reports. You can transfer them, but it is a bit fiddly. Hence it makes sense to use gnucash on your laptop as that you probably will have around most often. Once you start entering transactions into GnuCash on the day or the week you incur the expense, you are getting more control and it is perhaps then you would need the balance to match the bank's balance. Then you can adjust the Equity:Opening Balances to manipulate the starting sums so that current balances match those of your bank. This is easy. When you have entered transactions proactively (on the day or the week) and then later do an import from bank statement the transactions are matched automatically and then they are said to be reconciled (i.e. your manual entry gets matched by the entry from your statement.) So for beginning it is something like that. If any questions, feel free to ask. IMHO this is a process rather a one-off thing; I began once - got bored, but started again and now I find it immensely useful.", "title": "" }, { "docid": "c7eaa130ef48b436d0261060eaf23c20", "text": "If you're audited routinely you probably have an accountant to get this straight. It's not something that I would be too worried about as it is purely journal-entry issue, there's no problem with the actual money. Mistakes happen. I'd suggest converting the currency, taking loss/gain on the conversion as a capital loss/gain, and credit the correct currency to the correct account. If GnuCash causes problems - just record it in the EUR equivalent, putting in notes the actual SGD value. Note that I'm not an accountant and this is not a professional advice.", "title": "" }, { "docid": "7aed4fdea82e42dc1c111d0e275f97b8", "text": "I’m going to answer this because: Accounting books only reflect the dollar value of inventories. Which means if you look at the balance sheet of McDonalds, you will not see how many bags of French fries are remaining at their storage facility, you will only see the total value at cost basis. Your requirement for noting the number of shares purchased is not part of the double entry accounting system. When you transfer $10000 from bank to broker, the entries would be: The bank’s name and the broker’s name will not appear on the balance sheet. When you purchase 50 shares at $40 per share, the accounting system does not care about the number of shares or the price. All it cares is the $2000 total cost and the commission of $10. You have two choices, either place $10 to an expense account, or incorporate it into the total cost (making it $2010). The entries for the second method would be: Now your balance sheet would reflect: What happens if the price increases from $40 per share to $50 per share tomorrow? Do nothing. Your balance sheet will show the cost of $2010 until the shares are sold or the accounting period ends. It will not show the market value of $2500. Instead, the Portfolio Tracker would show $2500. The most basic tracker is https://www.google.com/finance/portfolio . Later if you finally sell the shares at $50 per share with $10 commission: Again, the number of shares will not be reflected anywhere in the accounting system. Only the total proceeds from the sale matters.", "title": "" }, { "docid": "77d21de280c5002caced348149bc390e", "text": "\"QUICK ANSWER What @Mike Haskel wrote is generally correct that the indirect method for cash flow statement reporting, which most US companies use, can sometimes produce different results that don't clearly reconcile with balance sheet shifts. With regards to accounts receivables, this is especially so when there is a major increase or decrease in the company's allowances for doubtful accounts. In this case, there is more to the company's balance sheet and cash flow statements differences per its accounts receivables than its allowances for doubtful accounts seems responsible for. As explained below, the difference, $1.25bn, is likely owing more to currency shifts and how they are accounted for than to other factors. = = = = = = = = = = DIRTY DETAILS Microsoft Corp. generally sells to high-quality / high-credit buyers; mostly PC, server and other devices manufacturers and licensees. It hence made doubtful accounts provisions of $16mn for its $86,833mn (0.018%) of 2014 sales and wrote off $51mn of its carrying balance during the year. Its accounting for \"\"Other comprehensive income\"\" captures the primary differences of many accounts; specifically in this case, the \"\"foreign currency translation\"\" figure that comprises many balance sheet accounts and net out against shareholders' equity (i.e. those assets and liabilities bypass the income statement). The footnotes include this explanation: Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (“OCI”) What all this means is that those two balance sheet figures are computed by translating all the accounts with foreign currency balances (in this case, accounts receivables) into the reporting currency, US dollars (USD), at the date of the balance sheets, June 30 of the years 2013 and 2014. The change in accounts receivables cash flow figure is computed by first determining the average exchange rates for all the currencies it uses to conduct business and applying them respectively to the changes in each non-USD accounts receivables during the periods. For this reason, almost all multinational companies that report using indirect cash flow statements will have discrepancies between the changes in their reported working capital changes during a period and the dates of their balance sheet and it's usually because of currency shifts during the period.\"", "title": "" }, { "docid": "97793b3a30e5346c88a4c290d48d8e81", "text": "\"That's Imbalance-USD (or whatever your default currency is). This is the default \"\"uncategorized\"\" account. My question is, is it possible to get the \"\"unbalanced\"\" account to zero and eliminate it? Yes, it's possible to get this down to zero, and in fact desirable. Any transactions in there should be reviewed and fixed. You can delete it once you've emptied it, but it will be recreated the next time an unbalanced transaction is entered. Ideally, I figure it should autohide unless there's something in it, but it's a minor annoyance. Presumably you've imported a lot of data into what's known as a transaction account like checking, and it's all going to Imbalance, because it's double entry and it has to go somewhere. Open up the checking account and you'll see they're all going to Imbalance. You'll need to start creating expense, liability and income accounts to direct these into. Once you've got your history all classified, data entry will be easier. Autocomplete will suggest transactions, and online transaction pull will try to guess which account a given transaction should match with based on that data.\"", "title": "" }, { "docid": "668cecf9dd78bc8eeb8ac981a1655342", "text": "Take a look at http://en.wikipedia.org/wiki/Comparison_of_accounting_software, in particular the rows with a market focus of 'personal'. This is probably one of the more complete lists available, and shows if they are web-based (like Mint) or standalone (like Quicken or Microsoft Money).", "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": "db751b9cc469f547550a323044b23d8e", "text": "For manual conversion you can use many sites, starting from google (type 30 USD in yuan) to sites like xe.com mentioned here. For programmatic conversion, you could use Google Calculator API or many other currency exchange APIs that are available. Beware however that if you do it on the real site, the exchange rate is different from actual rates used by banks and payment processing companies - while they use market-based rates, they usually charge some premium on currency conversion, meaning that if you have something for 30 dollars, according to current rate it may bet 198 yuan, but if he uses a credit card for purchase, it may cost him, for example, 204 yuan. You should be very careful about making difference between snapshot market rates and actual rates used in specific transaction.", "title": "" }, { "docid": "93651496bbc8ad51ee18fb100f61dfbc", "text": "I used to use Quicken, but support for that has been suspended in the UK. I had started using Mvelopes, but support for that was suspended as well! What I use now is an IPhone app called IXpenseit to track my spending.", "title": "" }, { "docid": "b5ac2c4ff3c5d1c545838bec51ac3bb8", "text": "\"Other responses have focused on getting you software to use, but I'd like to attempt your literal question: how are such transactions managed in systems that handle them? I will answer for \"\"double entry\"\" bookkeeping software such as Quicken or GnuCash (my choice). (Disclaimer: I Am Not An Accountant and accountants will probably find error in my terminology.) Your credit card is a liability to you, and is tracked using a liability account (as opposed to an asset account, such as your bank accounts or cash in your pocket). A liability account is just like an asset except that it is subtracted from rather than added to your total assets (or, from another perspective, its balance is normally negative; the mathematics works out identically). When you make a purchase using your credit card, the transaction you record transfers money from the liability account (increasing the liability) to the expense account for your classification of the expense. When you make a payment on your credit card, the transaction you record transfers money from your checking account (for example) to the credit card account, reducing the liability. Whatever software you choose for tracking your money, I strongly recommend choosing something that is sufficiently powerful to handle representing this as I have described (transfers between accounts as the normal mode of operation, not simply lone increases/decreases of asset accounts).\"", "title": "" }, { "docid": "1f08ad36b6bbbb7fc99e5aa9a06f0376", "text": "\"I'm no accountant, but I think the way I'd want to approach this kind of thing in Gnucash would be to track it as an Asset, since it is. It sounds like your actual concern is that your tracked asset value isn't reflecting its current \"\"market\"\" value. Presumably because it's risky it's also illiquid, so you're not sure how much value it should have on your books. Your approach suggested here of having it as just as expense gives it a 0 value as an asset, but without tracking that there's something that you own. The two main approaches to tracking an investment in Gnucash are: Of course, both of these approaches do assume that you have some notion of your investment's \"\"current value\"\", which is what you're tracking. As the section on Estimating Valuation of the concepts guide says of valuing illiquid assets, \"\"There is no hard rule on this, and in fact different accountants may prefer to do this differently.\"\" If you really think that the investment isn't worth anything at the moment, then I suppose you should track it at 0, but presumably you think it's worth something or you wouldn't have bought it, right? Even if it's just for your personal records, part of a regular (maybe annual?) review of your investments should include coming up with what you currently value that investment at (perhaps your best guess of what you could sell it for, assuming that you could find a willing buyer), and updating your records accordingly. Of course, if you need a valuation for a bank or for tax purposes or the like, they have more specific rules about how they are tracking what things are worth, but presumably you're trying to track your personal assets for your own reasons to get a handle on what you currently own. So, do that! Take the time to get a handle on the worth of what you currently own. And don't worry about getting the value wrong, just take your best guess, since you can always update it later when you learn new information about what your investment is worth.\"", "title": "" }, { "docid": "5fc6ec273abd1bf196aef714bfe04e1d", "text": "A pencil and a small notepad really work here, but if you have a smartphone then some way of using it makes sense as well. Try: Transcribe all of these onto a better record at the end of each day. Also record the amount of money in your wallet/purse/pocket every day, and check to see if the amounts you've recorded add up to the amount you've spent. It'll be easier to remember that newspaper you bought at the end of the day, rather than a week later. Or just record the difference as 'miscellaneous'.", "title": "" }, { "docid": "0c509b1b72a4cbf876193786938eb9a1", "text": "Use one journal entry, and split the expenses into the appropriate accounts. This can happen even if you never mix business and personal on the same receipt: say you order office supplies (which where I live are immediately deductible as an expense) and software or hardware (which must be depreciated because they are assets) on the same order. We have an account called Proprietors Loan which represents money the company is lending to the humans who own it, or that the humans are lending to the company. Were I to pay for my personal lunch on a business credit card, it would go through that account, increasing the amount the company has lent me or decreasing the amount I have lent it. Similarly if I made a business purchase with a personal card it would go through that account in the other direction. Where I live, I can lend my company all the money I want any time, but if the company lends me money there can't be an outstanding balance over the corporate year end. If you make two credit card entries of 5 and 10 when you go to reconcile your accounts it will be harder because you'll have to realize they together match the single 15 line on your statement. Making a single entry (your A option) will make reconciling your statement much easier. And that way, you'll probably reconcile your statements, which is vital to knowing you actually recorded everything.", "title": "" }, { "docid": "ccde069c7755ed62ee56a93b5a2fb5fd", "text": "I would suggest that you try ClearCheckbook. It is kind of like Mint, but you can add and remove things (graphs, features, modules) to make it as simple or diverse as you need it to be. It should be a workable solution for simply tracking both income and expenses, yet it will also provide extra features as needed. There is a free option as well as a paid option with added features. I have not used ClearCheckbook before, but according to their features page it looks like you may have to upgrade to the paid option if you want to have complete tagging/custom field flexibility.", "title": "" }, { "docid": "ed34d0cc8acae6af2b075ae12dcce9de", "text": "I agree with all of the answers, but knowing the amount of money saved will give new ideas to use this money to help develope new concepts that will help humanity.", "title": "" } ]	fiqa
7c6dc3af3c15c3dd3edf23625fd8888f	In Canada, are options available to subsidize conversion of a house into an energy efficient house?	[ { "docid": "02b3b967cf92a1763bd2de0667003e6b", "text": "There may be more, but a good starting point would be the ecoENERGY Retrofit Grants and Incentives. Natural Resources Canada's ecoENERGY Retrofit program provides financial support to implement energy-saving projects. There are different application processes for homes, commercial and institutional buildings and industrial facilities. Together we can reduce energy-related greenhouse gases and air pollution, leading to a cleaner environment for Canada. Also, there was a temporary home renovation tax credit about a year back, but that no longer exists and nothing has replaced it yet.", "title": "" } ]	[ { "docid": "f4a76c018283f7c0fa30c6b4ddcd5f00", "text": "\"Assuming \"\"take advantage\"\" means continue to build wealth, as opposed to blow it all on a fancy holiday... Downgrade As you already note, you could downgrade/downsize. This could happen via moving to a smaller house in the same area, or moving to an area where the cost of buying is less. HELOC Take out a Home Equity Line of Credit. You could use the line of credit to do home improvements further boosting the asset value (forced appreciation, assuming the appreciation to date is simply market based). Caution is required if the house has already appreciated \"\"considerably\"\" - you want to keep the home value within tolerance levels for the area. (Best not to have the only $300K house on a street of $190K-ers...) Home Equity Loan Assuming you have built up equity in the house, you could leverage that equity to purchase another property. For most people this would form part of the jigsaw for getting the financing to purchase again.\"", "title": "" }, { "docid": "43f49166cd5d96efbe0bc4b3264f732e", "text": "Hmmm. I hadn't considered that energy usage would be considered confidential. How about asking a nearby neighbor to share their next bill. If it's higher or lower than yours, just scale the history up or down accordingly. Other than that, the utility company might offer its own level billing plan where they handle the estimate and offer you the same payment each month.", "title": "" }, { "docid": "b19fafc7d6faf2d0fb654b77ef3d6e83", "text": "Solar water heaters are definitely questionable in the Northeast -- the season when you most need them is also the season when they are least effective. Solar electric isn't a huge moneymaker, but with rebates on installation and carbon-reduction credits (SRECs) -- and a group purchase discount if you can get one, either at a town level or through organizations like One Block Off The Grid -- it can definitely turn a profit. Early estimate was that my setup would pay its initial costs back in 4 years, and the panels are generally considered to be good for a decade before the cells have degraded enough that the panels should be replaced. I haven't had a negative electric bill yet, but I've gotten close, and my setup is a relatively small one (eight panels facing SSE on a 45-degree roof). Admittedly I've also been working to reduce electricity use; I don't think I have an incandescent bulb left in the house.", "title": "" }, { "docid": "7621f87330797bec2bb8ecc8fa2a2134", "text": "Having lived in both places, I have to say you can find a higher income in the US for the same job and can live in a small town versus having to live in a big city in Canada to find decent salaries. For similar sized cities, the cost of housing is significantly lower in the US than Canada. That is your biggest factor in cost of living. If you are thinking of NYC or San Francisco, there are no comparable size cities in Canada and you would probably be better off in Canada. My tax preparer was amazed at how much I paid in Capital Gains taxes when I left Canada. Maybe it is different now but I doubt it. The biggest free lunch in the US is a generous capital gains exemption when you sell your primary residence without any lifetime cap or cap on the number of times you can do it. There are rules on how long you have to live in it before selling. For investment real estate, all expenses are deductible in addition to fictional depreciation so with a mortgage you can have positive cash flow and pay no income tax. You can keep doing tax deferred exchanges into bigger and bigger rentals. When you are close to retirement, you can exchange into your ultimate beach home, rent it out a few years, then convert to a primary residence.", "title": "" }, { "docid": "19a5c1b6cfacdb7b8407acfbf381879d", "text": "I know that both Lowes and Home Depot (in Canada at least) will offer a 6 month deferred interest payment on all purchases over a certain dollar amount (IIRC, $500+), and sometimes run product specific 1 year deferred interest specials. This is a very effective way of financing renovations. Details: You've probably seen deferred interest -- It's very commonly used in furniture sales (No money down!!! No interest!!! Do not pay for 1 full year!!!) (Personally, I think it's a plot by the exclamation point manufacturers) It works like this: Typically, I manage these types of purchases by dividing the principal by 6, and then adding 5%, and paying that amount each month. Pay close attention to the end date, because you do not want to pay 22% interest on the entire amount. This also requires that you watch your card balance carefully. All payments are usually put to current purchases (i.e. those not under a plan) first, before they are applied to the plan balance. So if you are paying 250 a month on the new floor, and run up another $150 on paint, You need to pay the entire new balance, and then the $250 floor payment in order for it to be applied correctly. Also <shameless plug> http://diy.stackexchange.com </shameless plug> Consider doing it yourself.", "title": "" }, { "docid": "7dac3bea905e716cc1763cc0cedb785b", "text": "I could be wrong, but I doubt you're going to be able to roll the current mortgage into a new one. The problem is that the bank is going to require that the new loan is fully collateralized by the new house. So the only way that you can ensure that is if you can construct the house cheaply enough that the difference between the construction cost and the end market value is enough to cover the current loan AND keep the loan-to-value (LTV) low enough that the bank is secured. So say you currently owe $40k on your mortgage, and you want to build a house that will be worth $200k. In order to avoid PMI, you're going to have to have an LTV of 80% or less, which means that you can spend no more than $160k to build the house. If you want to roll the existing loan in, now you have to build for less than $120k, and there's no way that you can build a $200k house for $120k unless you live in an area with very high land value and hire the builders directly (and even then it may not be possible). Otherwise you're going to have to make up the difference in cash. When you tear down a house, you are essentially throwing away the value of the house - when you have a mortgage on the house, you throw away that value plus you still owe the money, which is a difficult hole to climb out of. A better solution might be to try and sell the house as-is, perhaps to someone else who can tear down the house and rebuild with cash. If that is not a viable option (or you don't want to move) then you might consider a home equity loan to renovate parts of the house, provided that they increase the market value enough to justify the cost (e.g. modernize the kitchen, add on a room, remodel bathrooms, etc. So it all depends on what the house is worth today as-is, how much it will cost you to rebuild, and what the value of the new house will be.", "title": "" }, { "docid": "b1e85d77351e39748acab3932a4c949f", "text": "I wish this was the case in Canada. I lost about 60k on my home in one year and have to sell now to move for work. In the US I could simply default and the bank takes the loss. In Canada if I default, CMHC pays the bank, then I'm sued by CMHC and stuck with the bad debt. Simply put - here the onus of repayment is on the lender, not the lending institution. It sounds good until you are the one looking at losing your shirt.", "title": "" }, { "docid": "3983513fbc5f18c664780eedeaa65c5e", "text": "You don't understand how global warming works and where most emissions sources come from (hint: transportation is a huge one). Never mind local air quality. Neither of these things mean we must live devoid of petroleum products. Just that we don't need to burn it and live with the exhaust it creates and the consequences that arise from it. But yes, wind and solar are already becoming the cheapest forms of electricity available. The price point for renewables no longer requires heavy subsidies and is now becoming cost competitive.", "title": "" }, { "docid": "6cb0b3cd7e595db96e28829e3958e946", "text": "No, look: Say a company needs to get $100 per solar panel to make a profit. But a consumer only wants to pay $80 for a solar panel, otherwise it isn't worth it. So, we have two options: 1. We offer a tax reduction to the consumer of $20. They now pay $100 for the solar panel, and get $20 back. The customer has now effectively paid $80 and the company has got $100. Or, 2. We give the company a subsidy for $20 per panel. They now sell the solar panel for $80, then get $20 in subsidy. The customer has now paid $80 and the company has got $100. You're against the 2nd option, in favour of the first. Have I understood you correctly?", "title": "" }, { "docid": "23f97e1fd4e6b6eb4fd2787b1b46e3d0", "text": "The new mortgage qualification rules were introduced to cool a hot Canadian housing real estate market. The rules are a pre-emptive measure intended to avoid a bubble (and later crash) in real estate. The government wants to make sure anybody buying a house can handle higher interest rates. Those rates, currently at record lows, are expected to go up later this year and into the future. The tighter mortgage rules include: Borrowers will need to qualify against a minimum standard 5-year fixed rate mortgage, even if they'll contract their mortgage at a lower or variable rate. Previously, the 3-year fixed rate mortgage was used as the minimum qualification standard. The amount a homeowner can borrow in a refinanced mortgage drops to 90% of the home value, down from 95% of the home value. A home is not meant to be an ATM machine. Anybody wanting to borrow to buy an investment property – i.e. a property that won't be their principal residence – will need a 20% downpayment instead of a 5% downpayment. The new rules go into effect April 19th, 2010. However, according to the backgrounder (see below): Exceptions would be allowed after April 19 where they are needed to satisfy a binding purchase and sale, financing, or refinancing agreement entered into before April 19, 2010. Definitive information about the new rules can be found at the Department of Finance of Canada. Specifically, refer to: Some additional news media sources:", "title": "" }, { "docid": "720eff3e3946efddd985444006d567dd", "text": "You don't mention where you live, but in the US, zoning laws, building codes, and insurance rules, would make this difficult if not impossible. People do convert shipping containers into housing, but they have to be modified to conform with local rules for habitability. This makes them more expensive then say, a trailer or a mobile home.", "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": "c30339f0f419ddd40bbf35748e5cd9b0", "text": "\"Let's look at basics. Your 340K mortgage amortized over 25 years at 3.5% is going to cost you $1700 in payments - almost exactly your rent. You won't be paying out less. You will in fact be paying out more, because you are now liable for more insurance, and any repairs will have to be paid for by you, not the landlord. So don't do this to save money. Figures from here. Don't forget that it is extremely likely that interest rates will go up in the next few years. 7% is not unlikely. Can you afford it if your payments double? You can get a fixed rate mortgage, but they are going to cost you much more than 3.5% for more than a couple of years. Don't be fooled by the 'pay yourself' argument for getting a mortgage. in the first few years almost all of your payments is interest, not paying down the principal. You are just switching from paying a landlord to paying a bank. There are huge advantages to waiting until you have a good down payment before buying a house. People with a big down payment get better interest rates, and don't need to pay as much CMHC insurance. You will be less at risk if the price of your house drops. Also ask yourself if you are sure you will be in your house for five years - if not, even real estate agents would usually admit you shouldn't buy. The truck payment shouldn't be an issue, as long as you are sure you can service both truck and mortgage payments. Nor is $600 in credit card debt significant in the big scheme. I would probably put any spare cash towards a down payment. It reduces your interest rate (possibly), some expenses with regard to your mortgage, and your risk if you have to sell and your house value has dropped. You might like to look at the government of Canada website \"\"Rent or buy\"\". It's down right now so I can't give you a link. I'll edit it in when it's back up. EDIT:Turns out it's offline for 'updating'. Here's the link.\"", "title": "" }, { "docid": "05cd46be385369599415155435befba7", "text": "Thanks for the feedback obelus, The cost is $20,000 to 50,000 sqft. Ya I am just looking for a rough idea of what a similar newer building is costing I figured what we are paying is really high as the building is extremely old and designated as a heritage site so we can't just knock it down. Beautiful building just not very efficient. The newer building is the route I think we are gonna end up going not sure what we can do with the current building as not too many options for resale. We can't adjust the lease rates to compensate for the cost as the tenants are all seniors and it is an integrated care home. A change to apartments would prove difficult as there are no kitchens in 90% of the suites. We are currently paying approximately $0.40 psf a month to heat (All electric) and the estimate for the new building is $0.1425 psf (Geothermal) so it is a pretty huge impact in comparison if it is possible but I haven't heard of a real building actually costing that little before. Thanks for the suggestion for the IR I think I am gonna get some one in after the holidays to do a inspection to see if there is any short term fixes we can do with our system.", "title": "" }, { "docid": "17be3095b0ff8910979116994f080aa3", "text": "In that case, forget this whole pot shop and look into buying some REITs (Real estate investment trusts). Or invest in QCLN, a ETF that invests in companies that produce and distribute green energy. You're looking for a get rich quick scheme, not a solid investment. You don't even have any money. You can't afford to lose $92,000 when you have $0.", "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
4dc344e8179f93083e8a884d7b0f2a3a	Is it beneficial to my credit score if I close my youngest credit lines while preserving my current credit utilization rate?	[ { "docid": "6d9b3337e729789a861beafbf9167475", "text": "\"I wrote How Old is Your Credit Card? some time ago. The answer is yes, this helps the credit score, but this factor, age of accounts, is pretty minimal. Grabbing deals, as you did, I'm actually down to a \"\"C\"\" for this part of my score, but still maintain a 770 score.\"", "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": "b1ec5b1cd6585ec8dbb45a4727ef590f", "text": "First, before we talk about anything having to do with the credit score, we need the disclaimer that the exact credit score formulas are proprietary secrets that have not been revealed. Therefore, all we have to go on are broad generalities that FICO has given us. That having been said, the credit card debt utilization portion of your score generally has at least two components: an overall utilization, and a per-card utilization. Your overall utilization is taken by adding up all your credit card debt and all your credit limits and dividing. Using your numbers above, you are sitting at about 95%. The per-card utilization is the individual utilization of each card. Your five cards range in utilization from 69% to 100%. Paying one card over another has no affect on your overall utilization, but obviously will change the per-card utilization of the one you pay first. So, to your question: Is it better on the credit score to have one low-util card and one high-util card, or to have two medium-util cards? I haven't read anything that definitively answers this question. Here is my advice to you: The big problem you have is the debt, not the credit score. Your credit card debt should be treated like an emergency that needs to be taken care of as quickly as you possibly can. Instead of trying to optimize your credit score, you should be trying to minimize the number of days until all of your credit cards are completely paid off. The credit score will take care of itself once you get your financial situation back on track. There is debate about the order in which one should pay off their debts, but the fact of the matter is that the order is not as significant as the intensity at which you pay them all off. Dedicate yourself to getting rid of the debts as fast as possible, and it won't matter much which order they get paid off in. Finally, to answer your question, I recommend that you attack the card debt one at a time instead of trying to pay them off evenly. Not because it will optimize your credit score, but because it will help you focus your debt-reduction energy as you work on resolving your debt emergency. Fortunately, the credit utilization portion of the credit score has no history, so once you pay all of these off, the utilization portion of your score will get better immediately, and the path you took to get there will be irrelevant. After the credit cards are completely paid off, and you have resolved never to spend money that you don't have again, it is time to work on the student loans....", "title": "" }, { "docid": "c80ca8f9dc887b28b5771edef88368c4", "text": "\"Here's my crude reasoning: Let's say you have just one recently acquired credit card with a $5000 limit. The company that issued the credit card set the $5000 limit based on however they assessed your risk. Now if you're using a significant portion of of the $5000 limit, it means (at least for them) that you are stretching your wallet. Even if you've been paying monthly consistently and since you are heavily using your limit, it also means that if you lose your primary source of money for even one month, (income etc.), then your risk to the lender increases sharply. Had you been making more money (compared to this $5000 limit) then either you'd have used less % of your available credit or you would've gotten your limits raised by asking your bank to re-evaluate your risk and increase the limit. Also your statement \"\"Why is a US credit score based on credit utilization?\"\" is slightly incorrect. As per FICO, Credit utilization has 35% weight while your payment history has a weight of 35% http://www.creditcards.com/credit-card-news/help/5-parts-components-fico-credit-score-6000.php To sum it up, we can debate if the weight for credit utilization should be higher or lower but unfortunately as others have pointed out, these scores are meant to help lenders not consumers. So whether we like it or not, the secret algorithms to calculate the scores and the actual weights (variables and rules) they use are completely out of our hands.\"", "title": "" }, { "docid": "6ec5bf02eb05a8458978817549471a9f", "text": "\"When I was in high school, my mom got me a joint credit account with both of our names on it for exactly this reason. Well, that, and to have in case I found myself in some sort emergency, but it was mostly to build credit history. That account is still on my credit report (it's my oldest by a few years), and looking at the age of it, I was 17 at the time we opened it (and I think my younger sister got one around the same time). In my case, I now have an \"\"excellent\"\" credit score and my weakest area is the age of my accounts, so having that old account definitely helps me. I don't think I've really taken advantage of it, and I'm not sure if I'd really be worse off if my mom hadn't done that, but it certainly hasn't hurt. And I plan on buying a house in the next year or so, so having anything to bump up the credit score seems like a good thing.\"", "title": "" }, { "docid": "3654c49e93418a601245e84ca431ad22", "text": "How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? might answer your question if US based. In the US, what counts is what shows on the bill. I've run $20K through a card with a $10K limit, but still ended the month under $2K by making extra payments. As long as you stay ahead of the limit by making mid-cycle payments, I see no issue with this strategy. If you keep running $30K/mo through a card with a $10K limit, the bank will eventually catch this and raise your limit as you will have proven you are more credit worthy.", "title": "" }, { "docid": "be3ebb9a653b7bd6e4acc2702bbd01c0", "text": "Nobody outside of the credit scoring agencies know exactly what goes into the scoring formula. That said, I don't think there is any evidence that keeping a fixed loan (car or mortgage) open is necessary to keep its effect on your score. It doesn't improve your utilization ratio like an open revolving credit line would. And depending on the exact details of how your specific lender reports the loan, it might appear detrimental to your debt-to-income ratio. I would simply pay it off.", "title": "" }, { "docid": "e4fc4ac4f7ca3ecb88f84aba4ae15a19", "text": "Most credit cards will allow you to pick the closing date. In fact almost every bill with the exception of utilities that collected usage by reading a meter at the house will either let you pick the closing date each month, or at least have several to pick from. They won't let you pick the length, but they will let you pick the day of the month. When I worked a job that paid once a month. I wanted all my bills due early in the month: get paid, pay bill, know how much I have left. When I went back to every other week spreading them out made more sense. No credit card had a problem with this. The transitional cycle was not the correct length, but after that it was fine. As Dheer pointed out extending the cycle to 90 days would involve them extending credit for much longer than they would be comfortable. Also the goal of keeping utilization under 30% would be very difficult, you would have to keep your spending per month to less than 10% of your credit limit. Some people have trouble not falling behind on credit card bills, having to set aside the money to pay the bill every 90 day may be way to tough for many people.", "title": "" }, { "docid": "59f95209b0e06624011debe520328886", "text": "Closed accounts are used when calculating Average Age of Accounts (AAoA) by FICO. They will drop off your report 7 years after their closure, at which time your AAoA will decrease and most likely lower your credit score. Keeping your oldest card with an annual fee (AF) is a tough question. Since the exact calculations are a secret, it's hard to quantify the value of that card. Keep in mind that if you do decide to close it now (or right before the next AF) it will continue to count for the next 7 years. What you can do is the following: Assume you won't be applying for any new cards in the next 7 years. Look at all your current accounts and calculate the AAoA of all of them that would still be on your report 7 years from now. Calculate it with and without your oldest card. The difference will show you the effect closing the card today will have. There is a potential way to raise your AAoA depending on if you have an AMEX card. AMEX reports all accounts as being open from your original 'member since' date. If your oldest AMEX (ever, not necessarily still open) is older than your AAoA, opening a new AMEX will actually raise your average. age of accounts is 15% of your score. note that some websites that calculate your AAoA for you (like creditkarma) don't count closed accounts, but since FICO does the age those websites generate should be ignored.", "title": "" }, { "docid": "05566dc1f7eabf546c872438675b8ce9", "text": "I too was very confused when I tried to be tricky and paid down my balance BEFORE the bill date. I thought this would be a great thing because it would show my utilization near zero percent. The opposite happen, it dropped my credit score from 762 to 708. Here is the best example I can come up with when it comes to utilization. Lets pretend you are an insurance company and you trying to figure out who are the best risk drivers. The people that drive 10% of the day are a better risk than the people that drive 50% of the day. The people that drive 50% of the day are a better risk than the people that drive 90% of the day. Here is the rub when people drive 0%. When you look at the people at 0% they appear to be walking, busing or flying. What they are NOT doing is driving. Since they are not driving (using Credit) they are viewed as POOR drivers since they are not keeping up on their driving skills. (Paying bills, watching how they spend, and managing their debt). So, now before the billing date I pay down my balance to something between 5 to 10% of my utilization. After the bill is issued, I pay it off in FULL. ( I am not going to PAY these crazy interest rates). What shows up on my credit report is a person that is driving his credit between 5 and 10% utilization. It shows I know I how to manage my revolving accounts. I know it's dumb, you would think they reward people that have zero debt, I don't hate banks I hate the game. ( I do love me some reward points =))", "title": "" }, { "docid": "c39644834b92aa943e87d1ec90e0826b", "text": "You don't need to use an open line of credit to help your credit score. You didn't ask this, but another option is to not cut up the card and keep the account open, even if you don't use it. I mention this because sometimes when you are calling in or setting up an online account to service the card, you may need to have the expiration date and CVV code on hand. This has burned me a few times as I had to hunt around for a card I rarely ever use. That being said, if you are worried that you might use the card if you know it's there, then sure, cut it up.", "title": "" }, { "docid": "487342b59ecd1739ead28cebd4f8eefb", "text": "Credit scores are designed to reflect your ability to make payments on time. As long as you're not closing your old credit card account, you will only see a minimal impact on your score. See estimated credit score breakdowns below:", "title": "" }, { "docid": "c266d9796adb77a13575342646c77fc7", "text": "This very much depends how you use that second line of credit and what your current credit is. There are of course many more combinations buy you can probably infer the impact based on these cases. Your credit score is based on your likely hood of being profitable to a creditor should they issue you credit. This is based on your history of your ability to manage your credit. Having more credit and managing it well shows that you have a history of being responsible with greater sums of money available. If you use the card responsibly now then you are more likely to continue that trend than someone with a history of irresponsibility. Having a line but not using it is not a good thing. It costs the creditor money for you to have an account. If you never use that account then you are not showing that you can use the account responsibly so if you are just going to throw the card in a safe and never access it then you are better off not getting the card in the first place.", "title": "" }, { "docid": "33017be05955f80f7df293a5ded9155c", "text": "\"You should never close a credit card account unless it has an annual fee or you are overspending on it. Open lines of credit - even un-utilized ones - have a positive effect on your credit score. First of all, they increase your total credit which helps your score. Second of all, they are always \"\"paid on-time\"\" which is another benefit. Finally, they increase the length of your credit history. You can keep unused credit cards forever in your drawer. They are rarely closed due to inactivity and cost you nothing. However, if your card has an annual fee, you should close it. The potential loss to your credit score is unlikely to offset the annual fee.\"", "title": "" }, { "docid": "8630f5c40a3b7606a87642027ce64970", "text": "In your specific case, I would leave them open unless you have a specific reason for wanting to close them - particularly, unless you feel closing them is necessary for you to not misuse them. The impact on the credit score is not why I say this, though. Much more important are the two competing real factors: My suggestion would be to take the cards and put them in your file cabinet, or whatever would cause you to not use them. In fact, you could even cut them up but not close the accounts - I had an account open that I didn't possess a physical card for several years for and didn't use at all, and it stayed open (though it's not guaranteed they'll keep it open for you if you never use it). In an emergency you could then ask them to send you a new copy of the card very easily. But, keep them, just in case you need them. Once you have paid off your balances on your balance-carrying cards, then you should consider closing some of them. Keep enough to be able to live for ~4-6 months (a similar amount to the ideal rainy day fund in savings, basically) and then close others, particularly if you can do so in a way that keeps your average account age reasonably stable.", "title": "" }, { "docid": "ada9b365d608336a462040cce275f6ab", "text": "The old underwriting standards were 28% home debt to income ratio and 33% consumer debt to income ratio. Consumer debt is calculated based on minimum payments. Now, most models are revised upwards... I believe 33/38 is more common today. As long as you are current on the accounts, closing credit or store revolving accounts will have little or no bearing. Just leave them dormant... there is no positive result from closing accounts that have no balance. Having low or no balances has NO negative impact on your credit score. Low balances are NOT red flags to lenders. Period. Here's a quote from Fair Issac: It's just not true that you can have too much available credit. That by itself is never a negative with the score. Sometimes the things you do to get too much can be a problem, such as opening a bunch of new accounts, but for the most part, that's just kind of an old wives' tale. The major drivers of credit scoring are: To improve your prospects for getting a mortgage, you should be reducing your spending and focusing 60/40 on saving for a down payment and paying down that $15k credit card, respectively. Having cash for a down payment is critical to your buying power, as zero-down loans aren't widely available in 2011, and a large downpayment will allow you to eliminate or reduce the time you are paying PMI. PMI reduces your buying power, and is a big waste of money.", "title": "" }, { "docid": "8ea2160b4af6fd3438b8a6b916d1322d", "text": "There is a subprime loaning bubble in the auto loan sector which is growing; while it's not in the $1 trillion range or as hidden as the real estate one was, it could cause issues down the road if it continues. The use of derivatives or specifically, CDS, is continuing for other suspect investments. It was used about 4 years ago to help hide Greece's sovereign default and like in 2008, it allowed the bad debt to be hidden and thrive to dangerous levels. The use isn't widespread and limited to several firms so far, but its return as an instrument of choice so soon after the financial crisis is a little worrying that it may be a cyclical crisis.", "title": "" } ]	fiqa
49312a03d14fb04d60cd73b92c2d21b7	Rent home temporarily with new owner occupied loan	[ { "docid": "a40bb98efec6409b70151dd126776cff", "text": "I'm assuming this is the US. Is this illegal? Are we likely to be caught? What could happen if caught? If you sign an occupancy affidavit at closing that says you intend to move in within 60-days, with no intention of doing so, then you'll be committing fraud, specifically mortgage/occupancy fraud, a federal crime with potential for imprisonment and hefty fines. In general, moving in late is not something that's likely to be noticed, if the lender is getting their money then they probably don't care. Renting it out prior to moving in seems much riskier, especially if you live in a city/state that requires rental licensing, or are depending on rental income to carry the mortgage. No idea how frequently people are caught/punished for this type of fraud, but it hardly seems worth finding out.", "title": "" } ]	[ { "docid": "c15d3750705dbbdb5af681e0a9faca91", "text": "I do not think the bank would consider the 52K as equity. Typically, a rent-to-own lease is technically a lease-option contract where you lease for a fixed amount and at some point during the lease you have the option to buy it at a discounted price. I think the bank would consider it a negotiated price. I know that those down payment assistance plans are considered price negotiation by the IRS for the purpose of basis cost and I suspect this would be similar where your basis is $236,800 and not $296,000.", "title": "" }, { "docid": "a124946eb7dc8c8a9cb3c3cc6b64bf69", "text": "\"As others have said, congratulations on saving up 75K in cash while seemingly not neglecting other areas of personal finance. Considering that only 15% of Americans have more than 10K saved this is quite a feat. source If you sell your old house, and buy the new one you will still be in really good financial shape. No need to comment further. Renting your current home and buying a new home introduces a great amount of risk into your life. The risk in this case is mitigated by cash. As others have pointed out, you will need to save a lot more to remove an acceptable amount of risk. Here is what I see: So without paying off your existing house I would see a minimum savings account balance of about double of what you have now. Once you purchase the new house, the amount would be reduced by the down payment, so you will only have about 50K sitting around. The rental emergency fund may be a little light depending on how friendly your state is to landlords. Water heaters break, renters don't pay, and properties can sit vacant. Also anytime you move into a new business there will be mistakes made that are solved by writing checks. Do you have experience running rentals? You might be better off to sell your existing home, and move into a more expensive home than what you are suggesting. You can continue to win at money without introducing a new factor into your life. Alternatively, if you are \"\"bitten by the real estate bug\"\" you could mitigate a lot risk by buying a property that is of similar value to your current home or even less expensive. You can then choose which home to live in that makes the most financial sense. For example some choose to live in the more dilapidated home so they can do repairs as time permits. To me upgrading the home you live in, and renting an expensivish home for a rental is too much to do in such a short time frame. It is assuming far too much risk far to quickly for a person with your discipline. You will get there.\"", "title": "" }, { "docid": "ba2428b923a0e7dab801eb370c32c17b", "text": "\"It's legal. That's what a home equity loan is, for example. More generally, what you're talking about is a \"\"second mortgage\"\". It has no effect on the primary mortgage that you've already made to your bank; they're still secured, and if you get foreclosed, they get paid, and only if there's something left over does the second mortgage holder get anything. That's why second mortgages are more risky than first mortgages, and why you might have trouble finding someone willing to do it.\"", "title": "" }, { "docid": "d6af964cb1e3fb2de9183a7122faaf35", "text": "You have to pay off the balance on the loan first. Also, FHA loans are not supposed to be used for rental properties. I don't know how you living there for a number of years changes things or how often is that rule enforced but you might need to refinance even if you rent it out.", "title": "" }, { "docid": "1d63f6ae6bae90732a16246a96f07bac", "text": "You would probably be best off checking through your loan documents to see if anything is listed in it in regards to tearing down the existing house. Likely it is not allowed. Thinking about it logically, the house is collateral for the mortgage, and you are wanting to destroy the collateral. I would expect the bank would not be pleased. Semi related question (answers have some good info) - Construction loan for new house replacing existing mortgaged house?", "title": "" }, { "docid": "213859f312c4e3f48e0be8dd4479e533", "text": "\"There are 2 and 3 family houses that have an \"\"owner occupied\"\" clause for certain financing. Of course, one would rent out the extra apartments without question. The key thing is that owner-occupied means just that, occupancy for tax purposes. Just using a small area like an office won't satisfy the requirement, so no, this isn't legal.\"", "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": "b5adc69cca3d027f18083e62afca7523", "text": "From the apartment owners perspective what was the purpose of $300? They promised they wouldn't rent it to somebody before you had a chance to see it. But lets say you did see it, and decided you didn't like the view. Would they have to give the money back? if so, why would they promise not to rent it if somebody showed up first? I would have made it clear, as the owner, what the money was for. It was a $300 fee to delay rental. You would have essentially bought x number of days of delay. You could view it as a mini-short-term rental. Of course there should have been paperwork involved. There should have been been a receipt that at least mentioned the amount of money involved. You may need to pay the amount owed, and may need to determine if you want to sue in small claims court. Of course your agent may have some liability based on your contract with them and any paperwork they signed when the money was sent to the owner. The fact that the bank sided with you doesn't mean the courts will.", "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": "07e123a177d889032a39a30591804b35", "text": "These are your options: Unfortunately this will not be a quick process. You should note that until a potential lender goes through a detailed review of your finances you have only been pre-qualified. This is not as good as pre-approved. With pre-qualified they are basing the determination on what you told them, not what you can prove. Because you are aware of your short period of continuous employment you are best to be completely honest with a potential lender. That way you don't run into problems 30 days down the road when they realize the issue. The home seller will not be happy; and there was time and money wasted on down payments, credit checks, home inspections, and appraisals. In the US in most markets while there is a significant risk that a particular house will not be available in 5 months, there is a very slight risk that a neighborhood will not be available in 5 months.", "title": "" }, { "docid": "a0e307477870f8f3bb1dbe9eead58366", "text": "\"This can be done, and there have been many good suggestions on things to do and watch out for. But to my shock I don't see anyone offering any words of caution about property managers! Whatever you do, don't assume they have your best interests at heart. Do not assume that \"\"no news is good news\"\" and that if you aren't hearing of problems and are just collecting rent checks, everything must be fine. You can easily end up with tenants you would never have allowed yourself, or tenants with pets that you would not have allowed, etc. Especially if the manager doesn't want you to have a vacancy and potentially lose you as a client, they may very well lower their standards just to get the place occupied. And a year or two or three later, you may find yourself looking at a very large repair bill and wonder how on earth it could have happened when you supposedly had someone looking out for your property! There are quality, ethical property managers out there. They are not all bad to be certain. But whatever you do, check up on them. And with multiple properties - especially if in multiple areas/states etc. - this can be nearly a full time job in itself. As the saying goes, \"\"Trust, but verify\"\". I have never found this to apply more than with rental properties and property management. Don't leave anything significant to them 100%. You can't even assume that a rule like \"\"all expenses over $50 must be cleared by me first\"\", as that can simply mean that they don't bother to come to you for certain kinds of repairs that would cost more than that, or that they just get them \"\"taken care of\"\" by their own person (done poorly, illegally, etc.) and never tell you. Never trust their choice of tenants blindly. Visit the place yourself at least every few months - a quick driveby at a minimum or better if you can, arrange a reason to walk through the house personally. Check the back yard, never assume that the front yard is indicative of anything else. Never assume that a \"\"no pets\"\" rule will be followed, or that tenants wouldn't lie to the management about having pets. Never assume that the tenants won't move additional people into the property as well. Always expect a bare minimum of 1 month vacancy every year, and an additional minimum of 1 month's rental revenue in unexpected maintenance/repairs every year. This is at a minimum! You might do much better than this, and have a high quality tenant in place for years who costs next to nothing in extra maintenance. But do not count on it. Rental real estate investing looks so simple on paper, where it's just numbers. But reality has a very rude habit of surprising you when you least expect it. After all, no one expects the Spanish Inquisition! Good luck!\"", "title": "" }, { "docid": "9e0d7490366ad11a373c0ff6c95a4fe0", "text": "If you help find a suitable next tenant and help smooth out the transition, most landlord generally don't have an issue to terminate the lease early, and move the contract to the new tenant. Remember that the biggest concerns for landlords is that they don't want the place to be empty (leaving an apartment empty costs them money due to tax, strata, bills, etc as well as putting in jeopardy whatever future plans they might have made under the assumption of a stable income from the rent). You could also offer to pay for the listing agent and other switching fees (e.g. putting bills under the new tenant's name, etc). If you don't have an early termination clause the rental agreement, or sometimes even when you do, these things are often negotiable. If you can guarantee that your leave won't leave them with an empty apartment with no-one paying rentals, most reasonable landlords wouldn't have issue with terminating early. Many rental agreements also have terms regarding early terminations. This usually involves paying a fee which amounts to a month or two of rent. This may vary.", "title": "" }, { "docid": "87da576f3c8012a74209d6db176a2c7a", "text": "\"You are assuming 100% occupancy and 100% rent collection. This is unrealistic. You could get lucky and find that long term tenant with great credit that always pays their bills... but in reality that person usually buys a home they do not rent long term. So you will need to be prepared for periods of no renters and periods of non payment. The expenses here I would expect could wipe out more than you can make in \"\"profit\"\" based on your numbers. Have you checked to find out what the insurance on a rental property is? I am guessing it will go up probably 200-500 a year possibly more depending on coverage. You will need a different type of insurance for rental property. Have you checked with your mortgage provider to make sure that you can convert to a rental property? Some mortgages (mine is one) restrict the use of the home from being a rental property. You may be required to refinance your home which could cost you more, in addition if you are under water it will be hard to find a new financier willing to write that mortgage with anything like reasonable terms. You are correct you would be taking on a new expense in rental. It is non deductible, and the IRS knows this well. As Littleadv's answer stated you can deduct some expenses from your rental property. I am not sure that you will have a net wash or loss when you add those expenses. If you do then you have a problem since you have a business losing money. This does not even address the headaches that come with being a landlord. By my quick calculations if you want to break even your rental property should be about 2175/Month. This accounts for 80% occupancy and 80% rental payment. If you get better than that you should make a bit of a profit... dont worry im sure the house will find a way to reclaim it.\"", "title": "" }, { "docid": "8458e6ebcc66911b291d37d15bc50a86", "text": "To start, I hope you are aware that the properties' basis gets stepped up to market value on inheritance. The new basis is the start for the depreciation that must be applied each year after being placed in service as rental units. This is not optional. Upon selling the units, depreciation is recaptured whether it's taken each year or not. There is no rule of thumb for such matters. Some owners would simply collect the rent, keep a reserve for expenses or empty units, and pocket the difference. Others would refinance to take cash out and leverage to buy more property. The banker is not your friend, by the way. He is a salesman looking to get his cut. The market has had a good recent run, doubling from its lows. Right now, I'm not rushing to prepay my 3.5% mortgage sooner than it's due, nor am I looking to pull out $500K to throw into the market. Your proposal may very well work if the market sees a return higher than the mortgage rate. On the flip side I'm compelled to ask - if the market drops 40% right after you buy in, will you lose sleep? And a fellow poster (@littleadv) is whispering to me - ask a pro if the tax on a rental mortgage is still deductible when used for other purposes, e.g. a stock purchase unrelated to the properties. Last, there are those who suggest that if you want to keep investing in real estate, leverage is fine as long as the numbers work. From the scenario you described, you plan to leverage into an already pretty high (in terms of PE10) and simply magnifying your risk.", "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": "" } ]	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
9a924e606ef37d4b1d108ae9b4209d8f	I co-signed a car but i am listed as the primary account holder for the loan	[ { "docid": "ed3a04403eb605af7ed68d5a4c79621c", "text": "The buyer can get another cosigner or you can sell the car to pay off the loan. These are your only options if financing cannot be obtained independently.", "title": "" }, { "docid": "654174b5239db25f62a839b71216c9ba", "text": "\"First of all you do not \"\"co-sign a car\"\". I assume what you mean by this is that you co-signed a loan, and the money was used to buy a car. Once you signed that loan YOU OWED THE MONEY. Once a loan exists, it exists, and you will owe the money until the loan is paid. If you do not want to owe the money, then you need to pay back the money you borrowed. You may not think \"\"you\"\" borrowed the money because the car went to someone else. THE BANK AND THE COURTS DO NOT CARE. All they care about is that YOU signed the loan, so as far as they are concerned YOU owe the money and you owe ALL of the money to the bank, and the only way to change that is to pay the money back.\"", "title": "" } ]	[ { "docid": "7ba1aa8230b37c2401e3c92abe036ee2", "text": "\"Your arrangements with the bank are irrelevant. Whoever is named on the title of the vehicle owns it. If she is the \"\"primary\"\", then I assume her name is on the title, therefore she owns the car. If you drive off with the car and it is titled in her name, she can report it stolen and have you arrested for grand theft auto unless you have a dated and signed permission in writing from her to use the car. Point #2: If a car loan was involved, then you didn't \"\"purchase\"\" the car, the bank did. If you want to gain ownership of the car, then you need to have her name removed from the title and have yours put in its place. Since the bank has possession of the title, this will require the cooperation of both your girlfriend and the bank.\"", "title": "" }, { "docid": "fc70fc22cffbad20451f3ac917be04db", "text": "There is a difference between an owner and a signer. An owner is the legal owner of the funds. A signer has access to withdraw the funds. In most cases, when a new personal account is opened the name is added as an owner&signer. However, that is not always the case. A person could be an owner, but not a signer, in a custodial arrangement. For example, a minor child may be an owner only on their account with a custodial parent listed as a signer. The minor could not withdraw from the account. A person could be a signer, but not an owner, in a business or estate/trust account. The business or estate would be the owner with individuals listed as signers only. The business employees do not own the funds, they are only allowed to withdraw and disburse the funds on behalf of the company. The creditor can only garnish/withhold funds that are owned by the indebted. If the second person on the account is only a signer, those funds cannot be withheld as part of a judgment against the second person (they don't own those funds). However, simply titling the second person as a signer only is not sufficient. If you share access with the second person and allow them to spend the money for their own benefit, they are no longer just a signer. They have become an owner because you are sharing your funds with them. Think of the business relationship as an example. The employee is a signer so they can withdraw funds and pay business expenses, like the electric bill. If the employee withdrew funds and bought herself a new dress, she is stealing because she does not own those funds. If the second person on the account buys things for themselves, or transfers some of the money into their own account, they are demonstrating that more than a signer-only relationship exists. A true signer-only relationship is where the individual can only withdraw funds on the owner's behalf. For example, the owner is out of town and needs a bill paid, the signer can write a check and pay the bill for the owner. A limited power of attorney may be worth looking into. With a limited POA, the owner can define the scope and expiration of the power of attorney. With this arrangement, the second person becomes an executor of the owner under certain circumstances. For example, you could write a power of attorney that states something like: John Smith is hereby granted the limited power to withdraw funds from account 1234, on deposit at Anytown Bank, for the purpose of paying debts and obligations and otherwise maintain my estate in the event of my incapacitation or inability to attend to my own affairs. This Power of Attorney shall expire on it's fifth anniversary unless renewed. If the person you have granted the power of attorney abuses their access, you could sue them and you would only have to demonstrate that they overstepped the scope of their power.", "title": "" }, { "docid": "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": "5fa642b6d1699325bda825d5440788e0", "text": "Make sure I am reading this correctly. You signed the car over to you BF, he took a loan against it and gave you the money? If so, you sold him the car and any use you have had of it since was at his consent. Outside of a written contract saying otherwise (and possibly even with one) it is now his car to do with as he pleases. It sucks that things are not working out in the manner you intended at the time, but that is the reality of the situation.", "title": "" }, { "docid": "acb816344bd11b198f25109dc751d108", "text": "Re (1), I don't think it makes any difference. What does make a difference is the presence of your signature on the loan documents, unfortunately. And even if your ex-business partner didn't include the LoC in his bankruptcy, if he or his company don't have any money the bank is still going to come after you.", "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": "" }, { "docid": "c6a6d74cd53d39bcc7907a768865a60e", "text": "Go to your local bank or credit union before talking to a dealership. Ask them if putting both names on the loan makes a difference regarding rates and maximum loan you qualify for. Ask them to run the loan application both ways. Having both names on the loan helps build the credit of the spouse that has a lower score. You may find that both incomes are needed for a car loan if the couple has a mortgage or other joint obligations. The lender will treat the entire mortgage payment or rent payment as a liability against the person applying for the loan, they won't split the housing payment in half if only one name will be on the car loan. Therefore sometimes the 2nd persons income is needed even if their credit is not as good. That additional income without a significant increase in liabilities can make a huge difference regarding the loan they can qualify for. Once the car is in your possession, it doesn't matter who drives it. In general the insurance company will put both spouses as authorized drivers. Note: it is almost always better to ask your bank or credit union about a car loan before going to the dealership. That gives you a solid data point regarding a loan, and removes a major complexity to the negotiations at the dealership.", "title": "" }, { "docid": "e8e6c38c95e169f5d01c19699cb2e6f0", "text": "Update: here is a message the seller just sent me. Does this make sense? I spoke with my bank again and they explained it a little better for me. I guess how it works is they will print out something for you that is called an affidavit in lieu of title that states they are no longer the lein holder and to release it to you. You then take that to the dol and they get it put in your name. He says that's how they do it all the time. When we get to the bank, the teller just verifies the check and I deposit it and they release the funds to pay off the account and that's when you would get the paperwork. You would be there for the whole process so nothing is sketchy. Sorry it's such a pain, I didn't understand how that worked. We've never sold a car with a loan on it before.", "title": "" }, { "docid": "6654e2df896eda68dbf3c8da9c17bbfb", "text": "I've done this, though with a loan company rather than a bank. We agreed on price, drove to the loan company's office (the seller having notified them in advance), I gave them the money, got the title, and they gave the balance to the seller. Important point is that you get the signed-off title from the lienholder.", "title": "" }, { "docid": "1cee712904c22253683819c081aae7fc", "text": "I've been an F&I Manager at a new car dealership for over ten years, and I can tell you this with absolute certainty, your deal is final. There is no legal obligation for you whatsoever. I see this post is a few weeks old so I am sure by now you already know this to be true, but for future reference in case someone in a similar situation comes across this thread, they too will know. This is a completely different situation to the ones referenced earlier in the comments on being called by the dealer to return the vehicle due to the bank not buying the loan. That only pertains to customers who finance, the dealer is protected there because on isolated occasions, which the dealer hates as much as the customer, trust me, you are approved on contingency that the financing bank will approve your loan. That is an educated guess the finance manager makes based on credit history and past experience with the bank, which he is usually correct on. However there are times, especially late afternoon on Fridays when banks are preparing to close for the weekend the loan officer may not be able to approve you before closing time, in which case the dealer allows you to take the vehicle home until business is back up and running the following Monday. He does this mostly to give you sense of ownership, so you don't go down the street to the next dealership and go home in one of their vehicles. However, there are those few instances for whatever reason the bank decides your credit just isn't strong enough for the rate agreed upon, so the dealer will try everything he can to either change to a different lender, or sell the loan at a higher rate which he has to get you to agree upon. If neither of those two things work, he will request that you return the car. Between the time you sign and the moment a lender agrees to purchase your contract the dealer is the lien holder, and has legal rights to repossession, in all 50 states. Not to mention you will sign a contingency contract before leaving that states you are not yet the owner of the car, probably not in so many simple words though, but it will certainly be in there before they let you take a car before the finalizing contract is signed. Now as far as the situation of the OP, you purchased your car for cash, all documents signed, the car is yours, plain and simple. It doesn't matter what state you are in, if he's cashed the check, whatever. The buyer and seller both signed all documents stating a free and clear transaction. Your business is done in the eyes of the law. Most likely the salesman or finance manager who signed paperwork with you, noticed the error and was hoping to recoup the losses from a young novice buyer. Regardless of the situation, it is extremely unprofessional, and clearly shows that this person is very inexperienced and reflects poorly on management as well for not doing a better job of training their employees. When I started out, I found myself in somewhat similar situations, both times I offered to pay the difference of my mistake, or deduct it from my part of the sale. The General Manager didn't take me up on my offer. He just told me we all make mistakes and to just learn from it. Had I been so unprofessional to call the customer and try to renegotiate terms, I would have without a doubt been fired on the spot.", "title": "" }, { "docid": "fc8673c9c96f25059fcf3f3becd6bc98", "text": "\"Depending on how you view the loan, it could either be considered an Asset or a Liability. Since you are not charging interest, it might seem more intuitive to create an \"\"Assets:Cash Loan\"\" account, and transfer money to & from it (when you receive payments) like you would with a bank account. Personally, I prefer to think of all loans as liabilities. Whether it's a debt which you owe someone, or a balance which someone else owes you, since it's an 'unsettled' amount I file it under \"\"Liabilities:Loan\"\". Either way, you record the initial balance as a debit from your bank, and then record payments as credits back to your primary account. The only way that income or expenses ever gets involved would be if you charged interest (income) or if you forgave some or all of the loan (expense) at some point in the future.\"", "title": "" }, { "docid": "e50b5bb1e442c035db4970ad52e0f7bb", "text": "Yes, but then either of you will need the other's permission to sell the car. I strongly recommend you get an agreement on that point, in writing, and possibly reviewed by a lawyer, before entering into this kind of relationship. (See past discussions of car titles and loan cosigners for some examples of how and why this can go wrong.) When doung business with friends, treating it as a serious business transaction is the best way to avoid ruining the friendship.", "title": "" }, { "docid": "b86c2b9dda3a99e37f02df0eeb65d867", "text": "I believe that your son will need to get a new loan for the car in his name only and use the proceeds of that loan to pay off the one you co-signed on. The only way that will happen is if he can find a lender willing to loan him the money based on his credit only. From the current lender's perspective, if your son isn't a good credit risk, then why would they let someone out of the loan who might be able to pay if your son defaults? If he is a good credit risk, then they, or someone else, should be willing to lend to him without you as co-signer. Also, as Dilip Sarwate mentioned, you might have to do something with the title, depending on whose name it is in.", "title": "" }, { "docid": "55424864462f469b1beffbe1d39f8ba0", "text": "\"It all comes down to how the loan itself is structured and reported - the exact details of how they run the loan paperwork, and how/if they report the activity on the loan to one of the credit bureaus (and which one they report to). It can go generally one of three ways: A) The loan company reports the status to a credit reporting agency on behalf of both the initiating borrower and the cosigner. In this scenario, both individuals get a new account on their credit report. Initially this will generally drop related credit scores somewhat (it's a \"\"hard pull\"\", new account with zero history, and increased debt), but over time this can have a positive effect on both people's credit rating. This is the typical scenario one might logically expect to be the norm, and it effects both parties credit just as if they were a sole signor for the loan. And as always, if the loan is not paid properly it will negatively effect both people's credit, and the owner of the loan can choose to come after either or both parties in whatever order they want. B) The loan company just runs the loan with one person, and only reports to a credit agency on one of you (probably the co-signor), leaving the other as just a backup. If you aren't paying close attention they may even arrange it where the initial party wanting to take the loan isn't even on most of the paperwork. This let the person trying to run the loan get something accepted that might not have been otherwise, or save some time, or was just an error. In this case it will have no effect on Person A's credit. We've had a number of question like this, and this isn't really a rare occurrence. Never assume people selling you things are necessarily accurate or honest - always verify. C) The loan company just doesn't report the loan at all to a credit agency, or does so incorrectly. They are under no obligation to report to credit agencies, it's strictly up to them. If you don't pay then they can report it as something \"\"in collections\"\". This isn't the typical way of doing business for most places, but some businesses still operate this way, including some places that advertise how doing business with them (paying them grossly inflated interest rates) will \"\"help build your credit\"\". Most advertising fraud goes unpunished. Note: Under all of the above scenarios, the loan can only effect the credit rating attached to the bureau it is reported to. If the loan is reported to Equifax, it will not help you with a TransUnion or Experian rating at all. Some loans report to multiple credit bureaus, but many don't bother, and credit bureaus don't automatically copy each other. It's important to remember that there isn't so much a thing as a singular \"\"consumer credit rating\"\", as there are \"\"consumer credit ratings\"\" - 3 of them, for most purposes, and they can vary widely depending on your reported histories. Also, if it is only a short-term loan of 3-6 months then it is unlikely to have a powerful impact on anyone's credit rating. Credit scores are formulas calibrated to care about long-term behavior, where 3 years of perfect credit history is still considered a short period of time and you will be deemed to have a significant risk of default without more data. So don't expect to qualify for a prime-rate mortgage because of a car loan that was paid off in a few months; it might be enough to give you a score if you don't have one, but don't expect much more. As always, please remember that taking out a loan just to improve credit is almost always a terrible idea. Unless you have a very specific reason with a carefully researched and well-vetted plan that means that it's very important you build credit in this specific way, you should generally focus on establishing credit in ways that don't actually cost you any money at all. Look for no fee credit cards that you pay in full each month, even if you have to start with credit-building secured card plans, and switch to cash-value no-fee rewards cards for a 1-3% if you operate your financial life in a way that this doesn't end up manipulating your purchasing decisions to cost you money. Words to the wise: \"\"Don't let the credit score tail wag the personal financial dog!\"\"\"", "title": "" }, { "docid": "a8d3723c9efcbb61d7eed84a2e6893c2", "text": "\"Having dealt with with Social Security, state agencies, and banks more than I'd care to, I would urge you to do the following: 1) Get a 100% clear answer on whether or not you are listed as \"\"joint\"\" or \"\"authorized user/signer\"\" for an account. This will probably require a call to the bank, but for less than an hour of you and your friend's time you will save yourself a whole lot of hassle. The difference is like this: if you worked at a business that added you as an authorized user for a credit or debit card, this would allow you to use the card to buy things. But that doesn't make the money in the bank yours! On the other hand if you are listed as \"\"joint\"\", this regards ownership, and it could become tricky to establish whether its your money or not to any governmental satisfaction. 2) You are completely correct in being honest with the agency, but that's not enough - if you don't know what the facts are, you can't really be honest with them. If the form is unclear it's ok to ask, \"\"on having a bank account, does being listed as an authorized user on someone else's account count if it isn't my money or bank account?\"\" But if you are listed as holding the account jointly, that changes the question to: \"\"I am listed as joint on someone else's checking account, but it isn't my money - how is that considered?\"\" To Social Security it might mean generating an extra form, or it might mean you need to have the status on the account changed, or they might not care. But if you don't get the facts first, they won't give you the right answers or help you need. And from personal experience, it's a heck of a lot easier to get a straight and clear answer from a bank than it is from a federal government agency. Have the facts with you when you contact them and you'll be ok - but trust me, you don't want them guessing!\"", "title": "" } ]	fiqa
f9688f8188f8b503ac35331220b1f030	Can a bank statement be submitted as a proof of investment?	[ { "docid": "cfe8e9dcb52bd41dc17b6d7e41bd1ca0", "text": "Probably not. A debit of 50K in your Bank statement does not mean that its invested into tax saving instrument. This question is best answered by the finance department of your company. Practise vary from organization to organization.", "title": "" } ]	[ { "docid": "883cafa8f5663e43e4c96d54317ed88f", "text": "Banks in certain countries are offering such facility. However I am not aware of any Bank in Hungary offering this. So apart from maintaining a higher amount in HUF, there by reducing the costs [and taking the volatility risks]; there aren't many options.", "title": "" }, { "docid": "81274911372a5638c5f3fdc2923a01e8", "text": "Yes, an investment can be made in a company before IPO. The valuation process is similar as that done for arriving at IPO or for a normal listed company. The difference may be the premium perceived for the idea in question. This would differ from one investor to other. For example, whether Facebook will be able to grow at the rate and generate enough revenues and win against competition is all a mathematical model based on projections. There are quite a few times the projection would go wrong, and quite a few times it would go correct. An individual investor cannot generally borrow from banks to invest into a company (listed or otherwise) (or for any other purpose) if he does not have any collateral that can be kept as security by the bank. An individual can get a loan only if he has sufficient collateral. The exceptions being small personal loans depending on one's credit history. The Private Equity placement arm of banks or firms in the business of private equity invest in start-up and most of the time make an educated guess based on their experience. More than half of their investments into start-ups end up as wiped out. An occasional one or two companies are ones that they make a windfall gain on.", "title": "" }, { "docid": "0c41ae0b3760a3df1db01624405faaab", "text": "There's a bit of truth to that, except in reality when you ask for business loan the bank most definitely looks at the background of the owners (assuming it's a small business). You might have some luck fooling investors as a way to get some capital, but that's doubtful as well if you have a history of starting companies that later fail.", "title": "" }, { "docid": "dba4f638e967cf689e1b735cc9daed10", "text": "No, it would not show up on the income statement as it isn't income. It would show up in the cash flow statement as a result of financing activities.", "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": "b81f264b75ed4b2f443dd090e38ece66", "text": "Every listed company needs to maintain book of accounts, when you are investing in companies you would have to look at what is stated in the books and along with other info decide to invest in it.", "title": "" }, { "docid": "dc95981f0c9cdf734451c8280615c376", "text": "The business and investment would be shown on separate parts of the tax return. (An exception to this is where an investment is related and part of your business, such as futures trading on business products) On the business side of it, you would show the transfer to the stocks as a draw from the business, the amount transferred would then be the cost base of the investment. For taxes, you only have to report gains or losses on investments.", "title": "" }, { "docid": "30ad621797b92569cef86bde4d7261c8", "text": "A bank is putting money on the line for you when they loan you money, which is not something they have to do. Not telling them what you intend to do with the money they are giving you, when asked, is fraud, which if you are caught will put you into very deep trouble.", "title": "" }, { "docid": "87f8690f4881bfc1793b27c16f699ea1", "text": "It means one has to provide documents to estabilsh the source of funds. This is to detect any money laundering. For example an salaried individual suddenly transacting for 1 Million, the bank would ask for proof of funds. Its possible that the individual has his own funds because of inheretance or a handsome bonus received etc or a it could be he is helping route some illegal money that is not his. There are regulations that state for what kind of transaction Proof of Funds are required.", "title": "" }, { "docid": "2254fe416d8e60c86d1f4473f3238fe0", "text": "Update: it looks like this may no longer be a requirement. I was able to withdraw from TreasuryDirect into another bank account without issue.", "title": "" }, { "docid": "beea3f671766c0cef4427097bdc05788", "text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!", "title": "" }, { "docid": "0d2d96950af76dbab5eb5dc2f0f4e461", "text": "I quit diligently reconciling monthly statements some years before everything was online, when I realized that for years before that, every time I thought I found a mistake, it was always my own error. I was spending a fair amount of time (over the years) doing something that wasn't helping me. So I quit. That said, I do look at the statements and/or check the transactions on a regular basis (I now use email notifications of automatic deposits as the trigger, and then look over withdrawals, too) to make sure everything looks appropriate. I'm less concerned about a bank error than I am about identity or account theft.", "title": "" }, { "docid": "b1bd0ea564ea8d24d149b9876be886d1", "text": "It is possible, i've contacted different banks, and only one bank (Wells Fargo) didn't say that they need all members in person, but gave me a form which my colleague filled to authorize me to open an account.", "title": "" }, { "docid": "c776ae1e50f4a97d9e34f3bf6c8e8395", "text": "You could classify the mortgage as a different assets class and then create automated additions and deductions to the account as deems fit. other than that quickbooks online is a bit fishy so it seems.", "title": "" }, { "docid": "2f7341b2266571f2063751a1c13c6bb9", "text": "You're trying to mitigate the risk of having your investments wiped out by fraud committed by your broker by using margin loans to buy stock secured by other, non-cash assets in your account. The solution that you are proposing does not make any sense at all. You mitigate a very low probability/high impact risk by doing something that comes with a high probability/medium impact risk. In addition to interest costs, holding stocks on margin subjects you to the very real risk of being forced to sell assets at inopportune times to meet margin calls. Given the volatility that the markets are experiencing in 2011, there is a high risk that some irrational decision in Greece could wipe you out. If I were worried about this, I would: If you have enough money that SIPC protection limits are an issue, you desperately need a financial adviser. Do not implement any strategy involving margin loans until you talk to a qualified adviser.", "title": "" } ]	fiqa
4c8fcd3c4df79e3ff9e6aaa42574ec30	Google free real-time stock quotes	[ { "docid": "42ae41bba0cb5ada50da52201b1b7d59", "text": "Previously, Google had a delayed update for their stock prices (15 minutes I believe). That change enabled users of Google Finance to see updates to stock prices in real-time.", "title": "" } ]	[ { "docid": "16fc45daadb1b77449a00539b723e29d", "text": "There are several Excel spreadsheets for downloading stock quotes (from Yahoo Finance), and historical exchange rates at http://investexcel.net/financial-web-services-kb", "title": "" }, { "docid": "0da566a2cdaad2c8b83676062a6e257f", "text": "\"Can you give me a rundown of what I'm seeing? Is this basically a super zoomed in tracker of a current stock or something? Where a stock fluctuates a few cents up/down on the day, and you just trade before it goes down, then trade as it goes up or what? EDIT: Is this really live? Can you say, \"\"Yes this is live narwalls\"\"\"", "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": "b1c3ef346e865a00ed0f22d1e57bf6c2", "text": "You might have better luck using Quandl as a source. They have free databases, you just need to register to access them. They also have good api's, easier to use than the yahoo api's Their WIKI database of stock prices is curated and things like this are fixed (www.quandl.com/WIKI ), but I'm not sure that covers the London stock exchange. They do, however, have other databases that cover the London stock exchange.", "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": "7f3e8cac96486db24344d65596d6fff2", "text": "Yahoo Finance has this now, the ticker is CL=F.", "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": "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": "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": "9539f48978a7abd2d6b7fa176ea6f1c2", "text": "TdAmeritrade offers this service for free using 3rd party company markit. From markit's site, below is their guarantee. http://www.markit.com/product/markit-on-demand Markit On Demand delivers an average of two million alerts per day through various technology platforms and via multiple channels, including email, instant messages, wireless, RSS and Facebook. Investors can subscribe to their alerts of choice, and Markit On Demand guarantees that they will receive an alert within five minutes of the event trigger for all price and volume alerts", "title": "" }, { "docid": "1191b085a69103a24611cadecff7bd21", "text": "\"I did a quick search, they have a $2B/5yr deal with google cloud. Downside is Google is a competitor potentially, especially in the ad market. Upside is SNAP revenue increased from $58M in 2015 to just over $404M in 2016. I think in today's market, everyone wants to hold the next \"\"Amazon\"\" or \"\"Google\"\" stocks at their conception. Sure would be nice if you had a few thousand in Amazon at their IPO. So I think pure speculation is why they were trading above IPO price for so long. It could be the next biggest thing, or it could fail in 5 years we never know these things lol\"", "title": "" }, { "docid": "dfd8a1a50537d16df5f1e082ddfefc2d", "text": "I'm answering in a perspective of an End-User within the United Kingdom. Most stockbrokers won't provide Real-time information without 'Level 2' access, however this comes free for most who trade over a certain threshold. If you're like me, who trade within their ISA Holding each year, you need to look elsewhere. I personally use IG.com. They've recently began a stockbroking service, whereas this comes with realtime information etc with a paid account without any 'threshold'. Additionally, you may want to look into CFDs/Spreadbets as these, won't include the heavy 'fees' and tax liabilities that trading with stocks may bring.", "title": "" }, { "docid": "d56cf7b2f6193eac92d57bd4a84e4d3b", "text": "\"The answer to each of your questions is no. It is important to appreciate that the \"\"quoted\"\" ticker price may be delayed by say 15 minutes, and thus is not \"\"real-time.\"\"\"", "title": "" }, { "docid": "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": "d9f08fc15393c1e8664baf7badbf7311", "text": "It looks like GOOG did not have a pre-market trade until 7:14 am ET, so Google Finance was still reporting the last trade it had, which was in the after-hours session yesterday. FB, on the other hand, was trading like crazy after-hours yesterday and pre-market today as it had an earnings report yesterday.", "title": "" } ]	fiqa
0a4ccf71a482ee0852b5ffa28ff6ea49	How to plan in a budget for those less frequent but mid-range expensive buys?	[ { "docid": "31f4c4a3ee243726b250881b50398efc", "text": "You would simply plan for misc. expenses in your budget, and allocate a small amount to this every time you do your budget, eventually building up a pool of money that you can then use whenever you have to make a purchase such as that.", "title": "" }, { "docid": "7b48cbbd4f123d229b5a0c52363ebd1d", "text": "\"I use a \"\"sinking\"\" fund. If you want to buy a $1000 bicycle, you put $100 per month into a savings account. 10 months from now, you can buy your $1000 bicycle. If you get a $500 windfall, you can either put it in the sinking fund and buy the item earlier. If you lose some income, you can put $50 per month in the fund.\"", "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": "cf9646025a0ff4a99136f9f51b20c0cc", "text": "\"We have what we call \"\"unallocated savings\"\" that go into a fund for this purpose. We'll also take advantage of \"\"6 months no interest\"\" or similar financing promotions, and direct this savings towards the payments.\"", "title": "" } ]	[ { "docid": "32a550a02ef92da8db1535bbecc751df", "text": "The best way is to not participate in the expensive habits at all. Try to direct your friends to cheaper venues. It's important to note that some hobbies are a large investment. Shooting sports, model airplanes, and customizing vehicles are all examples of hobbies you might want to avoid when you're on a budget.", "title": "" }, { "docid": "65d55d7a5968156b98d4dd595da12446", "text": "\"I'd recommend hitting the loan the hardest, but getting something invested as well. It's tempting to see these decisions as binary, so it's good to see you wondering if a \"\"mix\"\" is best. I admit to being a spreadsheet junky, but I think this is a good candidate for working up various scenarios to see where the pain/pleasure point is and once you've identified it, move forward with it (e.g., let's say it's a 10K lump sum you're dealing with, what does 5k on the loan and 5k invested look like over the next 6 months, 12 months, 24 months (requires assumptions on investment performance)? What about 6K loan, 4K invested? 7K loan, 3K invested? etc)\"", "title": "" }, { "docid": "4c372ebe4d33144e8b380f5ce9052c02", "text": "My approach won't work for everyone, but I keep a longer list of things I want in my head, preferably including higher value items. I then look at the cost of an item vs the amount of benefit it gets me (either enjoyment or ability to make more money or both). If I only had a few things I wanted, it would be easy to buy them even if the payback wasn't that great, but because I have a large list of things I'd like to be able to do, it's easier to play the comparison game in my head. Do I want this $50 thing now that will only give me a little bit of enjoyment and no income, or would I rather be able to get that $3000 digital cinema camera that I would enjoy having and could work on projects with and actually make money off of? (This is a RL example that I actually just bought last week after making sure I had solid leads on enough projects to pay myself back over time.) For me, it is much easier to compare with an alternative thing I'd enjoy, particularly since I enjoy hobbies that can pay for themselves, which is really the situation this strategy works best in. It might not work for everyone, but hobbies that pay for themselves can take many different forms. Mine tends to be very direct (get A/V tool, do projects that pay money), but it can also be indirect (get sports stuff, save on gym membership over time). If you can get things onto your list that can save you money in the long run, then this strategy can work pretty well, if not, you'll still have the overall saving problem, just with a longer wish list. That said, if you are good about saving already and simply want to make better use of your disposable income, then having a longer list may also work to let you seek out better deals for you. If you have funds that you know you can healthily spend on enjoyment, it is going to be difficult to choose nothing over something that gives enjoyment, even if it isn't a great return on the money. If you have alternatives that would give you better value, then it's easier to avoid the low value option.", "title": "" }, { "docid": "b2212bf69412ea6c14f623eea2fd0ac0", "text": "\"Are you asking \"\"what does everybody else do/spend\"\"? I think any amount less that 90% is \"\"safe\"\", but if depends on your goals. Saving a \"\"dime of every dollar\"\" is a good rule of thumb for retirement, so 90% is left to spend. But I believe that is the wrong way to think about it. You have expenses; some are optional and some are not. The percentages aren't the important thing. What is important is that you meet your obligations and meet your goals. Everybody is different, so I don't think you can reasonably your percent of expenses to somebody else. In setting up your budget, go the simple route. You can always get super detailed later if you want. INCOME As you have extra funds, be sure you have an emergency fund (~6 months of expenses) and a fully funded retirement. Pay off any outstanding debts. If you are so fortunate to have some left over, then revisit the savings amount or become an investor like many people here; or have fun and go on vacations; or buy a nicer car. The point being you will know you can afford it. If you put detailed categories under those main categories, that will give you a picture of where you spend you money and you can fix that if desire. If it bothers you that you spend 15% of your income on imported classical music, you can adjust that with a habit change.\"", "title": "" }, { "docid": "439dada372831d99bbfc79feee6e036b", "text": "More moving parts will make your budget harder to keep track of, not simpler. Budget systems like You Need a Budget recommend simplifying your accounts, even if the various accounts give you specialized bonuses like rewards for restaurants or gasoline or travel. The effort of keeping track of all the options and accounts can outweigh the value you get from them. Instead, I recommend using a simple and structured budget system (like YNAB) that walks you through all of the steps toward building good habits and keeping them simple so that you can maintain the habit.", "title": "" }, { "docid": "f95098e67fcd7635e3e6cf608ddf168c", "text": "\"First of all, I have to recognize up front that my \"\"spending personality\"\" is frugal. I don't recreational shop, and I save a lot of my total income. Building a budget and sticking to it is difficult, especially for people who are closer to living paycheck to paycheck than I. Theoretically, it should be easy to stick to a budget by overestimating expenses, but for many people planning to spend more than necessary isn't a luxury available. That said, I have a system that works for me, maybe it can work for you. This system lets me see how much I have to spend, and close to optimally arranges assets. As you can see, this system relies on some pretty strong upfront planning and adherence to the plan. And what you might not realize is that you can deviate from the plan in two ways: by spending variations and by timing variations. Credit should really help with a lot of the timing variations; it takes a series of expenses and translates them into one lump payment every month. As for spending variations, like spending 20 dollars for lunch when you only budgeted 5, it turns out this technique helps a lot. Some academic work suggests that spending with plastic is more likely to blow your budget than cash, unless you make detailed plans. But it sounds like your main problem is knowing whether you can afford to splurge. And the future minimum balance of your checking account can be your splurge number.\"", "title": "" }, { "docid": "f84fc57412f24d3e53079925b3255f9d", "text": "There are a lot of good answers above, all of them will probably work for you in some way or another. One point to note (from the procrastination theme) is that you could invest your free money that you have currently in some investment instrument which would require you to do some paperwork etc. to get out, this way the immediate cash flow is decreased and also invested. Now from each montly budget save a small amount for the things that you would like to buy. Give this small savings some months to accumulate so that you can afford only one of the items that you want to buy or target an item that you want to buy. After the money is accumulated, if you still want to buy the item, then you probably should. One point of note is that budgeting is also important on a monthly basis, Pete has provided excellent suggestion in this regard.", "title": "" }, { "docid": "41b672feae4a9d69a896ca23a684cf0c", "text": "Your question is rather direct, but I think there is some underlying issues that are worth addressing. One How to save and purchase ~$500 worth items This one is the easy one, since we confront it often enough. Never, ever, ever buy anything on credit. The only exception might be your first house, but that's it. Simply redirect the money you would spend in non necessities ('Pleasure and entertainment') to your big purchase fund (the PS4, in this case). When you get the target amount, simply purchase it. When you get your salary use it to pay for the monthly actual necessities (rent, groceries, etc) and go through the list. The money flow should be like this: Two How to evaluate if a purchase is appropriate It seems that you may be reluctant to spend a rather chunky amount of money on a single item. Let me try to assuage you. 'Expensive' is not defined by price alone, but by utility. To compare the price of items you should take into account their utility. Let's compare your prized PS4 to a soda can. Is a soda can expensive? It quenches your thirst and fills you with sugar. Tap water will take your thirst away, without damaging your health, and for a fraction of the price. So, yes, soda is ridiculously expensive, whenever water is available. Is a game console expensive? Sure. But it all boils down to how much do you end up using it. If you are sure you will end up playing for years to come, then it's probably good value for your money. An example of wrongly spent money on entertainment: My friends and I went to the cinema to see a movie without checking the reviews beforehand. It was so awful that it hurt, even with the discount price we got. Ultimately, we all ended up remembering that time and laughing about how wrong it went. So it was somehow, well spent, since I got a nice memory from that evening. A purchase is appropriate if you get your money's worth of utility/pleasure. Three Console and computer gaming, and commendation of the latter There are few arguments for buying a console instead of upgrading your current computer (if needed) except for playing console exclusives. It seems unlikely that a handful of exclusive games can justify purchasing a non upgradeable platform unless you can actually get many hours from said games. Previous arguments to prefer consoles instead of computers are that they work out of the box, capability to easily connect to the tv, controller support... have been superseded by now. Besides, pc games can usually be acquired for a lower price through frequent sales. More about personal finance and investment", "title": "" }, { "docid": "35a18ebf39052288dba1df16d3a440f3", "text": "\"Budgeting is a tool for planning, not for execution. It sounds like you don't have a problem BUDGETING (planning what to spend on what things) but rather with the execution of your plan. That is - living frugally. This is primarily an issue of self control and personal psychology - not an issue with the mechanics of budgeting and finance, which explains why the most popular personal finance \"\"gurus\"\" (Dave Ramsey, Suze Ormond) deal as much with your relationship to money and spending as they do with financial knowledge. There is no easy answer here, but you can learn to spend less. One helpful thought is to realize that whatever your current income is, someone in your community is currently making less than that and surviving. What would you do differently if your real, actual income was $100 or $200 less than it is currently. If your food budget is a concern, learn to cook cheaply. (Often, this is more healthy.) You mentioned schooling, so I assume you are on or near a college campus. Many colleges have all sorts of free-food opportunities. (I used to eat free vegetarian meals weekly at a Hare Krsna temple. Price of admission: listening to the monk read from the Bhagavad Gita.) Fast food is, of course, a complete no-no on low-budget living. It probably goes without saying, but just in case you haven't: cancel cable, get a cheap phone plan (Ting is excellent if available in your area), and otherwise see how you can squeeze a few dollars out of your bills. On the subject of frugality, I have found no book more enlightening than: Money Secrets of the Amish: Finding True Abundance in Simplicity, Sharing, and Saving\"", "title": "" }, { "docid": "e90889eb5f2065484f68f1a81ab324e9", "text": "I found the best way to do this was to make a spending plan at the beginning of the month with someone else. If you're married or in a relationship where you pool resources, then this is a natural way to sync up on your expectations. If you don't have a relationship of that nature, it's still good to have a friend that you talk to about things you are planning on buying. If I don't allow myself to buy things on a whim, if I have to take the time to justify my purchases to someone else, then I have to first think about the purchase and justify it to myself. Often the actual process of thinking it through is enough for me to talk myself out of it. Consider the tactics of car salesmen. Each time you attempt to leave the lot, to think about it overnight, they sweeten the offer to try to get you to buy before leaving. They know that if you leave the lot, you are much less likely to decide that you must have that car. You should have a policy of sleeping for one night before making any purchase over an arbitrary dollar amount say $250, or $500, or $1,000. Having that rule, and following it will save you a lot of buyers remorse. As an aside, I've had my eye on a 35mm prime lens for my camera for over a year now. I was ready to pay ~$500 for a nice lens that was discounted by $100, and I was a little sad that I missed the discount. However, I am very deliberate in my shopping, and I didn't want to buy until I read enough of the reviews to be certain about it. It turns out that the lens has a fatal flaw for landscape photography that most reviewers didn't notice because they were using it for portrait photography. I finally concluded that the lens I really wanted was an $800 lens. I looked at resale prices on my $600 lens and they are in the $350 range. So instead of missing out on a $100 discount, I missed out on a $150 loss trading up to the lens that I really want for the long term.", "title": "" }, { "docid": "ce7bc2c2cd732782fe38fbe089359593", "text": "The exact percentages depend on many things, not just location. For example, everyone needs food. If you have a low income, the percentage of your income spent on food would be much higher than for someone that has a high income. Any budgeting guidelines that you find are just a starting point. You need to look at your own income and expenses and come up with your own spending plan. Start by listing all of the necessities that you have to spend on. For example, your basic necessities might be: Fund those categories, and any other fixed expenses that you have. Whatever you have left is available for other things, such as: and anything else that you can think of to spend money on. If you can save money on some of the necessities above, it will free up money on the discretionary categories below. Because your income and priorities are different than everyone else, your budget will be different than everyone else, too. If you are new to budgeting, you might find that the right budgeting software can make the task much easier. YNAB, EveryDollar, or Mvelopes are three popular choices.", "title": "" }, { "docid": "482c834cf825bd1f559658f73a034ad2", "text": "In a word: budgeting. In order to have money left over at the end of the month, you need to be intentional about how you spend it. That is all a budget is: a plan for spending your money. Few people have the discipline and abundance of income necessary to just wing it and not overspend. By making a plan at home ahead of time, you can decide how much you will spend on food, entertainment, etc, and ensure you have enough money left over for things like rent/mortgage and utility bills, and still have enough for longer-term savings goals like a car purchase or retirement. If you don't have a plan, it's simply not reasonable to expect yourself to know if you have enough money for a Venti cup as you drive past the Starbucks. A good plan will allow you to spend on things that are important to you while ensuring that you have enough to meet your obligations and long-term goals. Another thing a budget will do for you is highlight where your problem is. If your problem is that you are spending too much money on luxuries, the budget will show you that. It might also reveal to you that your rent is too high, or your energy consumption is too great. On the other hand, you might realize after budgeting that your spending is reasonable, but your income is too low. In that case, you should focus on spending more of your time working or looking for a better paying job.", "title": "" }, { "docid": "f45108e61b6b73dc098892517e82086a", "text": "\"Best strategy that has worked for me is to remember first of all that you hardly ever need anything \"\"right now\"\". Try this: if you see something you want to buy, leave it for at least two weeks, better yet a month. If after that time you have hardly thought about it, then you almost certainly don't need it. But if you've thought quite a lot about owning it and how it will be beneficial, then perhaps it's worth picking up. You will probably find that a small percentage of things you'd like to buy make it through that screening period.\"", "title": "" }, { "docid": "358304736342d36c627f959472de9729", "text": "Communicate. I would recommend taking a course together on effective communications, and I would also suggest taking a course on budgeting and family financial planning. You need to be able to effectively communicate your financial plans and goals, your financial actions, and learn to both be honest and open with your partner. You also need to be certain that you come to an agreement. The first step is to draft a budget that you both agree to follow. The following is a rough outline that you could use to begin. There are online budgeting tools, and a spreadsheet where you can track planned versus actuals may better inform your decisions. Depending upon your agreed priorities, you may adjust the following percentages, Essentials (<50% of net income) Financial (>20%) Lifestyle (<30%) - this is your discretionary income, where you spend on the things you want Certain expense categories are large and deserve special advice. Try to limit your housing costs to 25% of your income, unless you live in a high-cost/rent area (where you might budget as high as 35%). Limit your expenses for vehicles below 10% of income. And expensive vehicle might be budgeted (partly) from Lifestyle. Limiting your auto payment to 5% of your income may be a wise choice (when possible). Some families spend $200-300/month on cable TV, and $200-300/month on cellphones. These are Lifestyle decisions, and those on constrained budgets might examine the value from those expenses against the benefit. Dining out can be a budget buster, and those on constrained budgets might consider paying less for convenience, and preparing more meals at home. An average family might spend 8-10% of their income on food. Once you have a budget, you want to handle the following steps, Many of the steps are choices based upon your specific priorities.", "title": "" }, { "docid": "1f67be3922fa6cb655e9dcc1c0f97932", "text": "\"The problem is \"\"what would have been\"\" without regulations. A good cause and effect is the Durbin amendment to DFA - they randomly regulated interchange debit card transactions (win for Walmart, loss for banks) so it no longer makes sense to offer free checking to poor people. WMT wins, banking loses, poor people lose. The other issue is maxing out regulations actually makes the system more frail as it promotes consolidation in the sector. Consultants love it - tons of free, easy, no thought work.\"", "title": "" } ]	fiqa
d32725a5a02ee5a1a5d6b78b3c906254	What is the Average Yield on High-Grade Corporate Bonds as of Now?	[ { "docid": "d921092e3b0e3462860f56a4e2f7cfd9", "text": "Yahoo! Finance would list it as 3.30 for the 20 year corporate AAA bonds. This is using the criteria from the Wikipedia link you stated in the initial question.", "title": "" } ]	[ { "docid": "82ea0d1ce78d1bcdea1963a057b8a119", "text": "I wrote one to check against the N3 to N6 bonds: http://capitalmind.in/2011/03/sbi-bond-yield-calculator/ Things to note:", "title": "" }, { "docid": "4ba0904c027d73e4cfead5e90c27a3d6", "text": "In addition to the other answers, also consider this: Federal bond interest rates are nowhere near the rates you mentioned for short term bonds. They are less than 1% unless you're talking about terms of 5-10 years, and the rates you mentioned are for 10 to 30-years terms. Dealer financed car loans are usually 2-5 years (the shorter the term - the lower the rate). In addition, as said by others, you pay more than just the interest if you take a car loan from the dealer directly. But your question is also valid for banks.", "title": "" }, { "docid": "63992ab475c060121e8878774c7589c3", "text": "A 20% dividend yield in most companies would make me very suspicious. Most dividend yields are in the 2-3% range right now and a 20% yield would make me worry that the company was in trouble, the stock price had crashed and the dividend was going to be cut, the company was going to go out of business or both.", "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": "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": "a4f2af7a90c5a816a855e15c4044574a", "text": "\"Negative Yields on Bonds is opposite of Getting profit on your investment. This is some kind of new practice from world wide financial institute. the interest rate is -0.05% for ten years. So a $100,000 bond under those terms would be \"\"discounted\"\" to $100,501, give or take. No, actually what you are going to get out from this investment is after 10 years when this investment is mature for liquidation, you will get return not even your principle $100,000 , but ( (Principle $100,000) minus (Negative Yields @ -0.05) Times ( 10 Years ) ) assume the rates are on simple annual rate. Now anyone may wander why should someone going to buy this kind of investment where I am actually giving away not only possible profit also losing some of principle amount! This might looks real odd, but there is other valid reason for issuing / investing on such kind of bond. From investor prospective: Every asset has its own 'expense' for keeping ownership of it. This is also true for money/currency depending on its size. And other investment possibility and risk factor. The same way people maintain checking account with virtually no visible income vs. Savings account where bank issue some positive rate of interest with various time factor like annually/half-yearly/monthly. People with lower level of income but steady on flow choose savings where business personals go for checking one. Think of Millions of Ideal money with no secure investment opportunity have to option in real. Option one to keeping this large amount of money in hand, arranging all kind of security which involve extra expense, risk and headache where Option two is invest on bond issued by Government of country. Owner of that amount will go for second one even with negative yields on bonds where he is paying in return of security and risk free grantee of getting it back on time. On Issuing Government prospective: Here government actually want people not to keep money idle investing bonds, but find any possible sector to invest which might profitable for both Investor + Grater Community ultimately country. This is a basic understanding on issue/buy/selling of Negative interest bearing bond on market. Hope I could explain it here. Not to mention, English is not my 1st language at all. So ignore my typo, grammatical error and welcome to fix it. Cheers!\"", "title": "" }, { "docid": "6e732648b31005f1d4e21e034a068d67", "text": "There is no single 'market interest rate'; there are myriad interest rates that vary by risk profile & term. Corporate bonds are (typically) riskier than bank deposits, and therefore pay a higher effective rate when the market for that bond is in equilibrium than a bank account does. If you are willing to accept a higher risk in order gain a higher return, you might choose bonds over bank deposits. If you want an even higher return and can accept even higher risk, you might turn to stocks over bonds. If you want still higher return and can bear the still higher risk, derivatives may be more appealing than stocks.", "title": "" }, { "docid": "9c8fa692b5c0406199e5b4ac1ac61e07", "text": "\"You sound like you know what you're talking about, but you say: \"\"foreign buyers will laugh at them\"\" But the Wall Street Journal, 9/20/12, says that in the last quarter FOREIGN INVESTORS ARE FLOCKING TO BUY JAPANESE BONDS IN RECORD LEVELS even though the yields are very much below other industrialized countries. LOL\"", "title": "" }, { "docid": "ebdb1628c3593302cee0c498228e0163", "text": "\"Wrong. Business lending has boomed under QE.. does the term \"\"cov-lite\"\" sound familiar? That's because there's so much liquidity, that they're willing to lend to companies with little to no restrictions. There is so much credit to go around, that a \"\"High Yield Bond\"\" can price at L+800 bps. When you're taking all the risk of a HY issuer, and maxing your return at 8.5%-9%, it's not too appealing. Instead, you could take a bit more risk, but also get all of the potential upside of equities. 1. Fed buys assets, injects money into banks. 2. Banks, flush with liquidity, need to put their balance sheet to use and begin lending to everyone. 2. Bond market flooded with supply, causes bond yields to drop to historic lows. 3. Investors don't enjoy limiting upside for incredibly low returns, and begin flooding equity markets to get some sort of yield. Business lending is booming, making equities the only place to get larger returns.\"", "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": "c26edba6c881f73da69c252b0661767a", "text": "There was this /r/offmychest post yesterday from a person claiming to work for a large investment bank as part of their default risk modelling team. The poster claims that the commercial and real estate lending divisions have been fudging numbers regarding default risks due to a lack of oversight and a bunch of bad commercial loans are about to become due. They further claim that a rise in interest rates could prevent many commercial properties from being able to properly ~~finance~~ refinance their loan. Here is the post: https://www.reddit.com/r/offmychest/comments/77a1vw/i_work_in_bankingfinance_risk_management_i_am/. Any one have any thoughts? I also found this link on the Mises blog (though it is a year old) that discusses how delinquency rates on commercial and industry loans have been steadily rising since bottoming out in 2015: https://mises.org/blog/delinquency-rates-rising-new-crisis-approaching. Could be something to keep an eye on. I would love to see some more updated data on delinquency.", "title": "" }, { "docid": "bb9efb537062f9e9ff6780d279fb71ca", "text": "\"I figured that there must be some people in a corporate office somewhere who sign $100M loans for lunch. :) The banks have that experience (but I'm not interested in asking them for a sample), and our consultants definitely have that experience, but I'm looking to evaluate the consultants with this exercise. If they provide the sample, then deliver to that sample, I'm still blind as to whether that sample is \"\"good\"\" as compared to something that the corporate world would use on the daily. I'd take your advice for the $1M loan, but I can't help but think as the factors of 10 increase, the data required to properly negotiate also increases. I don't want to go in blind, and provide a proposal that looks like a high school project.\"", "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": "c5da86ac16ae98fff435ef214930f834", "text": "I've recently discovered that Morningstar provides 5yr avgs of a few numbers, including dividend yield, for free. For example, see the right-hand column in the 'Current Valuation' section, 5th row down for the 5yr avg dividend yield for PG: http://financials.morningstar.com/valuation/price-ratio.html?t=PG&region=usa&culture=en-US Another site that probably has this, and alot more, is YCharts. But that is a membership site so you'll need to join (and pay a membership fee I believe.) YCharts is supposedly pretty good for long-term statistical information and trend graphs for comparing and tracking stocks.", "title": "" }, { "docid": "e8c5450e3d1e6e492f587ae662fb9d9e", "text": "\"I kind of understand the \"\"basics\"\", and have done a couple (with the assistance of pre-made excel sheets haha), I just don't feel that I'm creating an actual valuable valuation when I do one. While on the topic though, do you know where an individual investor can calculate the cost of debt for the WACC? I've been looking on morningstar and search up that public company and take the average of the coupon on all outstanding bonds. I don't feel like that's very correct though :(\"", "title": "" } ]	fiqa
88e71edaa7dcf220f38600f2a3233953	Definition of “secular” in the context of markets?	[ { "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": "07176319083e07bb2c52470705c3e0ad", "text": "Secular means a long term. A secular basis is something done on a long term basis while a secular trend is a long term trend. http://financial-dictionary.thefreedictionary.com/Secular", "title": "" } ]	[ { "docid": "a5c828411013510f191bb0f58be880db", "text": "I'm not 100% familiar with the index they're using to measure hedge fund performance, but based on the name alone, comparing market returns to market neutral hedge fund returns seems a bit disingenuous. That doesn't mean the article is wrong, and they have a point about the democratization of data, but still.", "title": "" }, { "docid": "e6d30beaaa40f21d5137f48c6ea2cca6", "text": "It's meaningful because we as a society have collectively decided that they are. It's all imaginary value, just like fiat money. That and in our capitalist society it is yet another product you are forced to buy or risk not having access to even a semblance of a decent life. It's a pretty good racket if I do say so myself.", "title": "" }, { "docid": "015d69d227ff40cdc668457c56adcc43", "text": "I think this could be changed quickly if they were forced to participate in the markets. Sadly I spent 3 years of my bachelors degree in finance studying EMH. Only in my last year, in two classes we covered the disiquilibrium.", "title": "" }, { "docid": "bc3847d8114169b949d9e465c019279a", "text": "That value differs between a starving man and a man who never fears lack of food. Let's take, instead, the value of your mother's affection. Were you to have to pay for that affection, for her hugs, they would lose value. Offering a price makes her affection worth LESS. Therefore value is not tied to currency, nor is value indelibly tied to Capitalism. Trading capital for your mother's affection negates the value of the affection.", "title": "" }, { "docid": "b68bad2dd32ed96a0277f985351565f9", "text": "It just states that the price doesn't justify the valuation which is not a factual statement. Also this is based on someones opinion of the companies P/E. The P/E was published and public information and idiots on both the buy and sell side jumped in. The article does not make a factual claim about Fraud (cooking the books), Francine McKenna speculates that management and auditors cooked the books.", "title": "" }, { "docid": "dee15ea7fff1088e166dda993e749bab", "text": "Yes, and .. how that _prevents_, abolishes, negates or in any way opposes what I've claimed? Markets are dynamic systems (they are after all multi-player non-cooperative non-zero-sum games), and as such they can have attractors (stable closed loops toward which the trajectory of (the state of the) system progresses, and if enters into, formally can't escape, since they are closed loops). Thus intervention is usually needed to maintain competition, which is called regulation. Regulatory capture, abuse of regulations, abuse of regulatory power, and so on are problems in the greater model (in politics), where constant input sort of guarantees that it has no (stable) attractors, because as long people exist, at least some of them will have a habit of revolting. The question is, is there a more efficient way to ensure existence of markets and ensure competition on them? And maybe some sort of anarchism is the answer, but sadly we're not doing enough experiments and research into that.", "title": "" }, { "docid": "24a9395a62b5a5b2112a25ecb3e5b2b9", "text": "\"I had to look up the word contentious real quick. Thank you for that, added it to my lexicon! That makes a lot of sense. Thus far, I was fortunate enough to only view videos from renowned economists and study from textbooks. I feel like this adds another layer to this entire field. Until now, all the problems I read in the books were fixed, and under the assumption of the \"\"perfect market.\"\" I had almost forgotten that people react to incentives. (Advocate a certain stance because it's beneficial to you, not necessarily the majority) It's funny how learning little things affect so much of my perspective! Thank you.\"", "title": "" }, { "docid": "98282522c728323c92538a28f7f11623", "text": "\"Why do I like not having a planet 100% covered in salt water, with no land or fresh water? Gee, I am glad you had to ask. Globalization has been happening since before the USA declared independence, it has been happening for the past few decades within the USA, and it has nothing to do with any type of market (free, capitalistic, socialist, communist, command economy). You can't credit \"\"capitalism,\"\" with the reason the USA was so fiscally successful, when there was gold, lumber, furs, practically free tobacco and cotton thanks to slave labor, etc. It was a free-for-all in the new world, and has grown exponentially, since. I can hope to have a voice in whether we're living in the final 100 years of life on earth with dry land and clean air. I am not going to be able to refute any economic philosopher taught in grad schools across the USA, whether they espouse a command economy, capitalism, socialism, anarchy, or any other option. I am sure you liked Ricardian Theory and your professor very well.\"", "title": "" }, { "docid": "3aeb419cf864ea9fea1ab97dc09d2669", "text": "The idea of a stockmarket is multiple people betting on the value of an asset and then getting paid the difference between their bet and the real value of the asset. The goal being to keep the value of the stock as accurate as possible so capital is allocated to companies that will use it most efficiently. The reward for people making these bets is a portion of that capital. What you are suggesting is just a graph of the average happiness. The difficult part of turning this into a market, is being able to assign value to happiness, value that you can gain or lose by choice. Ironically, money is a indicator of happiness. When apple came out with the iPhone, people saw it and decided it would make them happier if they owned it creating demand. Investors noticed that people believed owning an iphone would make them happier so they bid up the price of AAPL stock. People are happier with their iPhones and investors benefitted from this happiness and got cash allowing them to spend money on things to increase their happiness. In order to extract happiness from the stock market a lot of other things come into play. A biotech company curing cancer would be a solution to something that drastically decreases happiness. Increasing alcohol sales might be a result of people trying to offset the sadness in the short term but in the long term it is a depressant and doesn't make you happy. An individual might be happier with an extra $10B but overall 1 million people getting $10k each would increase average happiness much more. But somebody like buffet can invest in companies that can generate way more happiness than just handing out cash. The happiness report is an annual report of happiness. Looking at these results next to the Gini coefficient (income inequality), and industry growth by country might start to give you an idea of what affects happiness. For instance in Africa income inequality could sky rocket while the stock market plummets and happiness could still increase because of public health investments made years ago, causing the infant mortality rate to plummet. If you want to think about this topic I recommend reading the great escape by Angus Deaton.", "title": "" }, { "docid": "1079fa38f78777eb5807808538b834c2", "text": "Value is one area where economic theories tend to diverge and the (very) basic schools of thought both have excellent points in their favor. You've identified both here; one being that economic value can always be determined by net labor* or at least cost of inputs and the other being that economic value does not exist in and of itself and that only a market can determine value. In some ways it is just a question of world-view as much as anything but the concepts of natural prices or innate worth are difficult to argue against. At the same time, without exchange the concept of value has little meaning. So, as usual, it is some sophistry mixed with some sense. Both have elements of truth and both are considerably more complex than they seem at first. Interestingly though, neither seems to work very well as predictive models despite providing the basis for some incredibly complex and interesting mathematical workups. * Note that net labor is the sum of ALL labor involved and is incredibly difficult to quantify accurately.", "title": "" }, { "docid": "18aa96f3262074f80fbd3733e132a152", "text": "I think you're over complicating it! There is the market maker in the pure sense as what chilldontkill said - a bookie, a middleman. They are just the brokers in between the buyers and sellers, and they simply make profit off of the spread differential. But market maker is also used to refer to large, high volume buyers and sellers that can influence the price because they control a larger % of volume. These only really exist on low volume products, and they slowly ween out the larger the volume. On higher volume products, I like to refer to them as institutions - that is, well informed, large pockets - whether is be central banks, clearing houses, hedge funds, boutique firms. These are the people who are generally in the know and they often bet against eachother.hope this helps ...", "title": "" }, { "docid": "6dd2469c604b6b4a4aed2ae8e069aa41", "text": "Wait... You mean that the government interfering with the market was a net negative?! It's almost as if the government is full of humans, who, by nature, are short sighted and only concerned with being re-elected. What could possibly go wrong by allowing them to meddle in the markets?", "title": "" }, { "docid": "2c55e7ad63c097288e3c3304e75c7347", "text": "Yes, it's a term in economics. It is the economy that affects goods and services, and so the vast majority of the economy. It contrasts with the paper economy, which is what goes on in the financial sector and speaks more about the virtual value in bonds, financial instruments, and shares.", "title": "" }, { "docid": "0221b08de55ce6d99cfc7df8255d9b26", "text": "Hey thanks for your response. The commodity is actually electricity, so definitely not able to store. Would you mind giving me a short summary of your thought process or an example of how you compare liquid markets vs illiquid ones when looking at more traditional commodities? If that is a bit much to ask, as I am sure it could get quite involved do you have any reading recommendations? This little project has sparked an interest.", "title": "" }, { "docid": "1403c0dc25f5e605961b289b5b269a59", "text": "\"If you have already maxed your TSP contributions, the \"\"401k\"\" for military folks, you could consider a Traditional IRA contribution. They are tax-deductible, based on some limits, so it may reduce your tax liability. Many online services (Vanguard, Fidelity, etc.) offer quick and free setup of Traditional IRA accounts. If you have already maxed the Traditional IRA as well, you could look at making taxable investments through an online service. Like homer150mw, I would recommend low-cost funds. For reasons why, see this article by John Bogle.\"", "title": "" } ]	fiqa
3615edc1a5c52d54cab13ad8da900d3b	effect of bond issue on income statement	[ { "docid": "dba4f638e967cf689e1b735cc9daed10", "text": "No, it would not show up on the income statement as it isn't income. It would show up in the cash flow statement as a result of financing activities.", "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": "b7deba6712b7fb28aabe4197b393aa59", "text": "Assuming you are saying that the company issues 20,000 additional shares of its own stock and sells them for $8 each: The money from the sale is not income and not part of earnings. It is capital and appears on the balance sheet as part of shareholder's equity. With no other transactions, yes, the total of shares outstanding is increased by 20,000 to 100,000.", "title": "" }, { "docid": "2967b77ae227b3ece809a193dbd635fa", "text": "\"The most fundamental observation of bond pricing is this: Bond price is inversely proportional to bond yields When bond yields rise, the price of the bond falls. When bond yields fall, the price of the bond rises. Higher rates are \"\"bad\"\" for bonds. If a selloff occurs in the Russian government bond space (i.e. prices are going down), the yield on that bond is going to increase as a consequence.\"", "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": "a976a049f5f67eca0de8bd55f6069b31", "text": "\"This effect has much empirical evidence as googling \"\"dividend price effect evidence\"\" will show. As the financial economic schools of thought run the gamut so do the theories. One school goes as far to call it a market inefficiency since the earning power thus the value of an equity that's affected is no different or at least not riskier by the percentage of market capitalization paid. Most papers offer that by the efficient market hypothesis and arbitrage theory, the value of an equity is known by the market at any point in time given by its price, so if an equity pays a dividend, the adjusted price would be efficient since the holder receives no excess of the price instantly before payment as after including the dividend since that dividend information was already discounted so would otherwise produce an arbitrage.\"", "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": "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": "1a5352b97ed3708b09f8a8e4769ed2b0", "text": "\"Eh. A FICO change is more important than you think. Underwriting waterfalls almost always include minimum FICO scores. This only really becomes important when you get into securitization and the standards (both GSE and Private-Label) required for MBS issuance. Because -- of course -- an underwriter can originate a loan and then hold it it on the books (this is very prevalent in non-conforming Jumbo loans). That said, if you want to sell the whole loans to a GSE or private label, they have to meet underwriting requirements (Reps & Warranties). To your original answer: you're right that it probably won't make a difference but not because FICO doesn't matter. Moreso because there are only 9 million potential \"\"borrowers\"\" affected and that 9 million most likely doesn't constitute any real demand for mortgages. This also ignores the possibility that FICO requirements in underwriting standards adjust to FICO 9; but I really doubt that they will.\"", "title": "" }, { "docid": "1972c4bb86c1c26f86d8243cf45d2cbc", "text": "\"To your first comment: yup. To your second comment, A = L + E. If E goes down, and L goes up, the net effect is 0. Then, if L goes down, and A goes up, the net effect is 0 and we are balanced once again. There is no \"\"rebalancing\"\" equity. You just have to make sure that, at the end of your journal entries, the accounting equation holds. It's a very unintuitive concept to wrap your head around, but spend some time mapping out the flow of various journal entries. Once it clicks, you'll really understand the logic.\"", "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": "9fe82b5a5fe49e5cbba23b29f4fee54e", "text": "\"I have a quick question about statement of cash flows and how Account Receivable (Net) and Prepaids affect it (I've already asked the accounting subreddit but was wondering if anyone who does fundamental analysis etc would have a take on it). It stems from a homework problem where I have to reconstruct a cash flow statement using two comparative balance sheets (end of period 2013 and end of period 2014) and a change in retained earnings statement. The following transaction took place in 2014 \"\"The firm wrote off accounts receivable as uncollectible totaling $16,300 in 2013 and $18,500 in 2014. It recognized expired insurance of $4,100 in 2013 and $3,900 in 2014.\"\" My understanding is that the write offs have already been subtracted in order to yield Account Receivable (Net) and therefore I can just take the change in that account and make the appropriate entry. For the recognition of expired insurance I can simply take the change in the Prepayment account and record the appropriate cash flow entry. Am I correct in assuming this? Or did they give me those amounts in order to figure out Accounts Receivable (Gross) and take the change in that?\"", "title": "" }, { "docid": "42f339e971647b05cea2661ae64b1c55", "text": "\"The answer is yes. And the reason is if today's interest rates are lower than the interest rate (coupon) at which the bond was issued. The bond's \"\"lifetime value\"\" is 100 cents on the dollar. That's the principal repayment that the investor will get on the maturity date. But suppose the bond's coupon rate is 4% while today's interest rate is 3%. Then, people who bought the bond at 100 would get 4% on their money, while everyone else was getting 3%. To compensate, a three year bond would have to rise to almost 103 so that the so-called yield to maturity\"\" would be 3%. Then there would be a \"\"capital loss\"\" (from almost 103 to 100) that would exactly offset the extra interest, that is 1% \"\"more\"\" for three years. If today's interest rates are negative (as they were from time to time in the 1930s, and in the present decade), the \"\"negative\"\" interest rates will prevent the buyer from getting the \"\"lifetime value\"\" (as defined by the OP) of principal plus interest over the original life of the bond. This happens in a \"\"flight to quality\"\" situation, where people are willing to take a (small) capital loss on Treasuries in order to prevent a large possible loss from bank failures like those that took place in 2008.\"", "title": "" }, { "docid": "7f1e8c5ba2bbd1302597d9a89ab0c762", "text": "In the question you cited, I assumed immediate exercise, that is why you understood that I was talking about 30 days after grant. I actually mentioned that assumption in the answer. Sec. 83(b) doesn't apply to options, because options are not assets per se. It only applies to restricted stocks. So the 30 days start counting from the time you get the restricted stock, which is when you early-exercise. As to the AMT, the ISO spread will be considered AMT income in the year of the exercise, if you file the 83(b). For NQSO it is ordinary income. That's the whole point of the election. You can find more detailed explanation on this website.", "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": "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": "" } ]	fiqa
ecab19d66ae6721774a4bbb9d59929eb	In NYC is there sales tax on services like computer / cell phone repair?	[ { "docid": "d6a98d3d7c90ccb8fe872ecdb9013ed4", "text": "According to the New York State Department of Taxation and Finance, your service would appear to be exempt from taxes. However, if you are charging for tangible items, those would incur a sales tax.", "title": "" } ]	[ { "docid": "0660a055e498255f0629f66e7b8303f2", "text": "\"Tax is often calculated per item. Especially in the days of the internet, some items are taxable and some aren't, depending on the item and your nexus. I would recommend calculating and storing tax with each item, to account for these subtle differences. EDIT: Not sure why this was downvoted, if you don't believe me, you can always check with Amazon: http://www.amazon.com/gp/help/customer/display.html/ref=hp_468512_calculated?nodeId=468512#calculated I think they know what they're talking about. FINAL UPDATE: Now, if someone goes to your site, and buys something from your business (in California) and the shipping address for the product is Nevada, then taxes do not have to be collected. If they have a billing address in California, and a shipping address in Nevada, and the goods are shipping to Nevada, you do not have to declare tax. If you have a mixture of tangible (computer, mouse, keyboard) and intangible assets (warranty) in a cart, and the shipping address is in California, you charge tax on the tangible assets, but NOT on the intangible assets. Yes, you can charge tax on the whole order. Yes for most businesses that's \"\"Good enough\"\", but I'm not trying to provide the \"\"good enough\"\" solution, I'm simply telling you how very large businesses run and operate. As I've mentioned, I've done several tax integrations using software called Sabrix (Google if you've not heard of it), and have done those integrations for companies like the BBC and Corbis (owned and operated by Bill Gates). Take it or leave it, but the correct way to charge taxes, especially given the complex tax laws of the US and internationally, is to charge per item. If you just need the \"\"good enough\"\" approach, feel free to calculate it by total. Some additional reading: http://en.wikipedia.org/wiki/Taxation_of_Digital_Goods Another possible federal limitation on Internet taxation is the United States Supreme Court case, Quill Corp. v. North Dakota, 504 U.S. 298 (1992),[6] which held that under the dormant commerce clause, goods purchased through mail order cannot be subject to a state’s sales tax unless the vendor has a substantial nexus with the state levying the tax. In 1997, the federal government decided to limit taxation of Internet activity for a period of time. The Internet Tax Freedom Act (ITFA) prohibits taxes on Internet access, which is defined as a service that allows users access to content, information, email or other services offered over the Internet and may include access to proprietary content, information, and other services as part of a package offered to customers. The Act has exceptions for taxes levied before the statute was written and for sales taxes on online purchases of physical goods.\"", "title": "" }, { "docid": "f35cdefe4d37dced6edcef4c60a2dbc2", "text": "\"In the US service animals are treated like durable medical equipment from a tax POV, and some expenses can be deducted. Likewise, expenses associated with working animals are business or hobby expenses than can be deducted to a certain extent. But pets, no. Legally they are \"\"chattels\"\" -- property that can move. Generally speaking, you can't deduct the cost of maintaining your belongings.\"", "title": "" }, { "docid": "e52366d8966e913b60bd0a8484a839bf", "text": "Not sure if serious or not, but i'll bite. First of all the service you are purchasing is the access to credit card, which runs on a network supplied by financial institutions. Secondly credit card is an optional fee, taxes are mandatory (unless you are a crook).", "title": "" }, { "docid": "1929140fbd7cd49e779438748d5ab54d", "text": "As the article says, selling warranties & one on one tutorials is a benchmark for individual sales ability. I don't know about Prada, but yes - many upscale department stores do still offer commission. And just about every store has something to upsell you on. I don't mean to debate the merits of a commission-based sales system; I'm just pointing out that the competition (Sprint/Verizon) use one. And pay better as a result.", "title": "" }, { "docid": "848f96c11dba0694cc5c7388bd4ed21b", "text": "I am a very light TurboTax user and have expensed a laptop in the past (since it was used exclusively for work) and used the itemized deduction there and has no issues. Just not sure if there was a limit or anything of note to realize ahead of time. Thanks!", "title": "" }, { "docid": "5c22e61a7595820510bba71d13b4e43b", "text": "\"I was just reading Consumer Reports' December 2009 issue. The issue's focus is electronics, and there was a small section on extended warranties in the \"\"Best electronics\"\" article. Here's what they said: Extended warranties still aren't worth buying Seven in 10 respondents to our survey on buying major electronics reported they were pitched an extended warrranty. However hard they're sold, extended warranties are generally bad investments. Most electronics products won't need a repair, especially if you choose brands that have fared better than others in the reliability ratings we include in this section. In the unlikely event they break, other Consumer Reports survey data has shown, the average repair bill is often comparable with the cost of a warranty. However, buying a plan that includes accidental damage might be worth considering for a laptop or netbook that you'll use a lot on the go. And buying a computer warranty that extends tech support, too, might make sense if you or a gift recipient could use a lot of hand-holding. [...] Paying with your credit card might automatically double the manufacturers' warranty and offer other benefits at no extra cost [...] Seven in 10 respondents to our survey on buying major electronics reported they were pitched an extended warrranty. However hard they're sold, extended warranties are generally bad investments. Most electronics products won't need a repair, especially if you choose brands that have fared better than others in the reliability ratings we include in this section. In the unlikely event they break, other Consumer Reports survey data has shown, the average repair bill is often comparable with the cost of a warranty. However, buying a plan that includes accidental damage might be worth considering for a laptop or netbook that you'll use a lot on the go. And buying a computer warranty that extends tech support, too, might make sense if you or a gift recipient could use a lot of hand-holding. [...] Paying with your credit card might automatically double the manufacturers' warranty and offer other benefits at no extra cost [...] BTW, I like Consumer Reports and I am a long-time subscriber. Check them out if you haven't before.\"", "title": "" }, { "docid": "1f092ae9a34b187d8096bbfa6fc1168d", "text": "Im still dealing with a $1,000 laptop i bought from them that stopped working after 6 months. They replaced the mobo and now it BSODs every five mimutes. I have four service orders, three phone calls, and a web chat related to it, and they want me to file a lemon law document for a replacement. Which has to be done at the store i bought it from, with a copy of the service record that the store manager is responsible for obtaining. Because thats gonna happen.", "title": "" }, { "docid": "abe49f26f27ffe70f80550ff0b9d841a", "text": "\"Payment gateways such as Square do not normally withhold tax. It is up to you to pay the appropriate tax at tax time. That having been said, Square does report your payments to the IRS on a form 1099-K if your payments are large enough. According to Square, you'll get a 1099-K from them if your total payments for the year add up to $20,000 AND more than 200 transactions. Whether or not they report on a 1099-K, you are required to pay the appropriate taxes on your income. So now the question becomes, \"\"Do I have to pay income tax on the proceeds from my garage sale?\"\" And the answer to that question is usually not. When you sell something that you previously purchased, if you sell it for more than you paid for it, you have a capital gain and need to pay tax on that. However, generally you sell things in a garage sale at a loss, meaning that there is no tax due. If you make more than $20,000 at your garage sale and the IRS gets a 1099-K, the IRS might be curious as to how you did that with no capital gain. So if you sell any big ticket items (a bulldozer, for example), you should keep a record of what you paid for it, so you can show the loss to the IRS in the event of an audit.\"", "title": "" }, { "docid": "796b8729a7d5ef3302592bffe7c41ff0", "text": "Amazon and other online retailers actually now support bipartisan legislation to level the playing field regarding online sales taxes. Value Added Taxes (not sales taxes in the typical sense) are the way to go, as they are much more difficult to evade and can't be sheltered via the Cayman Islands. They can easily be made progressive through the use of rebates to lower income individuals. There is a reason it is in place in over 130 countries.", "title": "" }, { "docid": "d0f2dd20b251f53f5555a871c0e88556", "text": "\"I suppose it is on the surface, when you look at the cost of that indivdual item to your individual doorstep. But one most consider the efficiency of the entire system. While one item may be a chore, the UPS driver is really an online shopping delivery man. Courier companies have developed very efficient networks of delivery. Vastly more efficient than the net sum of the chaotic weekend chore runs that we all do, heading from store to store accross the city. I know i've switched over to online shopping almost exclusively to avoid that. I'd rather wait a few days and have whatever i need delivered to home or work than waste one of my week days \"\"running around\"\". I know that doesn't sound like much of a point, but consider the effect if a significant percentage of the population began to utilize online shopping. Replacing the chaotic hordes of individuals running around all week, with an efficient delivery system. The infrastructure savings would be likely be significant, and quality of life would be improved for most with less errands to be running. It would be interesting if that could be quantified and compared to what the income from a state sales tax would bring.\"", "title": "" }, { "docid": "0d74c216e02d90b3f91895ccfafc87b9", "text": "Yeah, but they have a price match policy; have them price match themselves or go home and order it online. Or hell, use your smart phone on their free wifi to place the order so the sales person doesn't get credit for the sale and can't harass you for a warranty.", "title": "" }, { "docid": "5238c0ba5f4606aa524073518e455c1d", "text": "Summarized article: The Department of Commerce reported that retail sales increased 1.1% in September, exceeding analysts' expectations. The biggest jump in consumer spending came from car sales, gasoline and electronics. Electronic sales jumped 4.5%, likely due to the debut of Apple's iPhone 5. Additionally, higher gas prices led to 2.5% increase in spending at gas stations. The latest report suggests the economy is expanding as consumer spending drives about 2/3 of the US economy. Other data showed manufacturing activity in New York state shrank for the third straight month as US manufacturers feel the effects of a slowing global economy. Shares rose and yields on government debt increased as the retail sales report bolstered investor sentiment. * For more summarized news, subscribe to the [/r/SkimThat](http://www.reddit.com/r/SkimThat) subreddit", "title": "" }, { "docid": "73ab673797aa3b1fa350a26387173819", "text": "Yeah, this was a big deal with hotels jamming cell signals to force people to buy their wi-fi. Many fines have been handed out, with bipartisan agreement. I doubt Amazon would be so audacious, and they'd eventually get reemed. Beyond that, politicians still seem to dispise Amazon for allegedly dodging taxes.", "title": "" }, { "docid": "a377f67fb9ea0522d326e45b041eb6d5", "text": "How do you know you are playing their cost plus tax? Retailers in the US currently only collect state sales tax on purchasers who are based in the same state they are in. For example, our business is in NY so we charge NY state sales tax. We do not charge sales tax for anyone living in any other state (or country). If your shipping address is in South America, the people you are buying from in the US should not be charging you any tax. You may have to pay customs duties and fees, but these are not sales tax.", "title": "" }, { "docid": "27e5998e7b9dd858f4d92cf5826e3a7f", "text": "It's been a PR free-for-all with these hurricanes. It's kind of disgusting. Google was giving free phone repairs to Pixels that nobody will ever use but they spent a whole day bragging about their good deed. Many others did similar victory laps.", "title": "" } ]	fiqa
fbe4806c709db06b77fa6a413586e505	What is the correct pronunciation of CAGR?	[ { "docid": "feda58ab4887628b798861aced8d0b84", "text": "\"I always hear people pronounce it to rhyme with \"\"bagger\"\".\"", "title": "" }, { "docid": "2f89de8913df7fa00410588fcc7a9093", "text": "Most readers probably know that an acronym is an invented word made up of the initial letters or syllables of other words, like NASA or NATO. Fewer probably know that an initialism is a type of acronym that cannot be pronounced as a word, but must be read letter-by-letter, like FBI or UCLA. A quote from Daily Writing Tips. CAGR is an initialism, and should not be pronounced.", "title": "" } ]	[ { "docid": "316f7f42e4a123453b673e15177a9d75", "text": "> quesorizo (queso + chorizo) And if you were actually, you know, in Mexico it would be a choriqueso. So much for authenticity. Although, to be fair, that would mostly be used in the greater D.F. area. In, say, Guanajuato they wouldn't make up stupid names in the first place and it would simply be queso con chorizo.", "title": "" }, { "docid": "56736602f21db5d09956941769bd03aa", "text": "\"I think the issue here is the rules say that \"\"relevant current events in finance\"\" are acceptable when (I think) that wording is too loose. \"\"Current events in finance\"\" is just very, very general, and anything related to central banking, monetary or fiscal policy, global austerity, analysis of index movements, sovereign defaults (and speculation thereof) qualifies a \"\"current events in finance\"\" - so technically, the rules aren't being broken. I think that having the language tightened a bit would help set the subreddit tone a little more accurately.\"", "title": "" }, { "docid": "e43414a4796452742034cd684b247986", "text": "Danh sách các Công ty Chứng Khoán có nguy cơ vỡ nợ 01 CTCP CK Thăng Long 02 CTCP CK Thương mại và Công nghiệp Việt Nam 03 CTCP CK Maritime Bank 04 CTCP CK Thủ Đô 05 CTCP CK Sao Việt 06 CTCP CK Quốc tế Việt Nam 07 CTCP CK Tràng An 08 CTCP CK Phương Đông 09 CTCP CK Đông Nam Á 10 CTCP CK Quốc Gia 11 CTCP CK Đại Dương 12 CTCP CK VIT 12 CTCP CK Tầm Nhìn 13 CTCP CK Hà Nội 14 CTCP CK Hamico 15 CTCP CK Vina 16 CTCP CK SME (đã phá sản trong năm 2011) 17 CTCP CK Hà Thành 18 CTCP CK NH Phát triển Nhà Đồng bằng Sông Cửu Long 19 CTCP CK Navibank 20 CTCP CK NH Sài Gòn Thương Tín 21 CTCP CK Việt Quốc 22 CTCP CK FLC 23 CTCP CK Trường Sơn 24 CTCP CK BETA 25 CTCP CK Tân Việt 26 CTCP CK Cao su 27 CTCP CK Sài Gòn Tourist Mọi Tài Sản cần phải được chuyển giao sang các Công ty Chứng Khoán tốt hơn nhằm hạn chế RỦI RO !", "title": "" }, { "docid": "e6f81acac948e365f140fdfb3daf3d0e", "text": "Hi! This is just a friendly reminder letting you know that you should type it as `¯\\\\\\_(ツ)_/¯` to format it correctly. A backslash on reddit is used as an escape character, meaning that it can be used to make special characters, such as underscores and other backslashes ignore the formatting that they do to other characters on Reddit, and instead display them literally. --- ^I ^am ^a ^bot. ^If ^I ^have ^done ^something ^wrong, ^please ^message ^my ^owner, ^[John_Yuki](https://www.reddit.com/user/John_Yuki/).", "title": "" }, { "docid": "8a56238e87f61f08084fe4d8d5f824ad", "text": "Go through the IRS Publication 521. Generally, relocation assistance is given either as : or", "title": "" }, { "docid": "61e3b59c031e69b6163cdeb5253bd8ca", "text": "Thank you Skyy8 for voting on PORTMANTEAU-BOT. This bot wants to find the best and worst bots on Reddit. [You can view results here](https://goodbot-badbot.herokuapp.com/). * ^^Even ^^if ^^I ^^don't ^^reply ^^to ^^your ^^comment, ^^I'm ^^still ^^listening ^^for ^^votes. ^^Check ^^the ^^webpage ^^to ^^see ^^if ^^your ^^vote ^^registered!", "title": "" }, { "docid": "368790e5eacbd6516fd0071c53808ddd", "text": "Google will be issuing Class C shares (under the ticker symbol GOOCV) to current GOOG holders in the beginning of April. The Class C shares and Class A shares will then change symbols, with the Class C shares trading under GOOG. This was announced on January 30th. Details are in this benzinga article: Projected Trading Timeline March 27 - April 2 Record Date - Payment Date Class C shares commence trading on March 27 as GOOCV on a when issued basis Class A shares continue to trade as GOOG, with entitlement to Class C shares Class A shares will also trade on an ex-distribution basis, without entitlement to the Class C shares, as GOOAV April 3 EX Date The ticker for the Class A shares will change from GOOG to GOOGL The ticker for the Class C shares will change from GOOCV to GOOG and commence regular way trading The ticker for the Class A shares that traded on an ex-distribution basis - GOOAV - will be suspended", "title": "" }, { "docid": "13aab8dcb42ce054e25ea550940581ae", "text": "Yeah, that's no typo. I could've spelled that name when I was 13, and anybody who's ever laid their hands on a finance book should be able to spell it, let alone somebody who claims to actually work there and to have traded millions on their behalf.", "title": "" }, { "docid": "53715f3693b0a7430d04ed2a85a24a3f", "text": "IRR is the acronym for internal rate of return. And it appears that you do understand how it works. It's not the phrase most investors use for their own returns. I'd typically talk about my own return last year, or over the last decade, etc, as well as what the S&P did during that time, and might even use the term CAGR, compound annual growth rate, although I wouldn't pronounce it 'kegger' or anything like that. Aside from discussing company investments in some MBA class, the only time I'd use IRR is in an excel spreadsheet to calculate the return over time of a series of my own investments. The nothing magic about this, it's a function of an initial dollar investment, time passing, and the final value. All else is addition complexity based on multiple deposits/withdrawals, etc. If I deposit $100 and get back $200 in a year, it's a 100% IRR. Disclosure - I am no fan of Investopedia or re-explaining its wording on these topics. I've caught multiple errors in their articles, and unlike the times I've emailed my friends at the IRS who quickly fix typos and mistakes I've caught, Investopedia authors are no better than bloggers (which I am) who take offense at any criticism (which I do not).", "title": "" }, { "docid": "a2401db5e2cd379a4f06579cf4ee94a6", "text": "\"Not even wrong The phrase \"\"not even wrong\"\" describes any argument that purports to be scientific but fails at some fundamental level, usually in that it contains a terminal logical fallacy or it cannot be falsified by experiment (i.e., tested with the possibility of being rejected), or cannot be used to make predictions about the natural world. The phrase is generally attributed to theoretical physicist Wolfgang Pauli, who was known for his colorful objections to incorrect or sloppy thinking. Rudolf Peierls documents an instance in which \"\"a friend showed Pauli the paper of a young physicist which he suspected was not of great value but on which he wanted Pauli's views. Pauli remarked sadly, 'It is not even wrong'.\"\" This is also often quoted as \"\"That is not only not right; it is not even wrong,\"\" or \"\"Das ist nicht nur nicht richtig; es ist nicht einmal falsch!\"\" in Pauli's native German. * ^[ [^PM](https://www.reddit.com/message/compose?to=kittens_from_space) ^\| [^Exclude ^me](https://reddit.com/message/compose?to=WikiTextBot&message=Excludeme&subject=Excludeme) ^\| [^Exclude ^from ^subreddit](https://np.reddit.com/r/business/about/banned) ^\| [^FAQ ^/ ^Information](https://np.reddit.com/r/WikiTextBot/wiki/index) ^\| [^Source](https://github.com/kittenswolf/WikiTextBot) ^] ^Downvote ^to ^remove ^\| ^v0.24\"", "title": "" }, { "docid": "7edc501f23544a2f09453840525871f2", "text": "Consultant included a passing comment about whether companies were singular or plural. ... Writing about them as a Businesses plural entity seems oddly formal and doesn't look right at all. ... I had this scenario myself when referring to our own company name.", "title": "" }, { "docid": "6afdb629c29baa41d942a71a800817af", "text": "\"I don't think any of us claims pizza is an American creation instead of an Italian one. Pizza is an Italian creation. We are only saying that the regular pizzas they have in the US are mostly non-Italian style, and shouldn't be count as real authentic Italian food. It'd be like saying pastas are an Chinese creation. Pastas was inspired by the Chinese, but the Chinese didn't create pastas, they have [mian] (http://en.wikipedia.org/wiki/Chinese_noodles ), which means noodles. Point is, if someone change something too much and that thing becomes a \"\"new/different\"\" thing, we will call that person the creator and use its terms.\"", "title": "" }, { "docid": "f8a6da48d236e45fd1ced72bdf8bdfaa", "text": "Yes, I see the same problem. Google's version seems to be correct, however.", "title": "" }, { "docid": "9dc01201aa4269618c5e42e2e8990c96", "text": "Both are correct depending on what you are really trying to evaluate. If you only want to understand how that particular investment you were taking money in and out of did by itself than you would ignore the cash. You might use this if you were thinking of replacing that particular investment with another but keeping the in/out strategy. If you want to understand how the whole investment strategy worked (both the in/out motion and the choice of investment) than you would definitely want to include the cash component as that is necessary for the strategy and would be your final return if you implemented that strategy. As a side note, neither IRR or CAGR are not great ways to judge investment strategies as they have some odd timing issues and they don't take into account risk.", "title": "" }, { "docid": "7fa35b3cedda44ab3cc11b982d40296e", "text": "Sedar is I guess the Canadian equivalent of EDGAR. You can find the company's filings there. Here's a picture from their filings. Can't post the link, if you go and find the filing through Sedar you'll know why (it's not as nice a site as EDGAR). The 4.8 million is from unrealized gain on biological assets. So that's what it is. The reason, I think, as to why Operating Income is a positive 2.67 even though Operating Expense and Gross Profit are both negative is because Google Finance backed into Operating Expense. Operating Income is the same between the two sources, it's just the unrealized gain that moves.", "title": "" } ]	fiqa
739c1d6f318f43d859674d8277673fef	Company revenue increased however stock price did not	[ { "docid": "8857170018f503149b7d0033ac8cbc9f", "text": "It's great that you have gotten the itch to learn about the stock market. There are a couple of fundamentals to understand first though. Company A has strong, growing, net earnings and minimal debt, it's trading for $100 per share. Company B has good revenue but high costs of goods and total liabilities well in excess of total assets, it's trading for $0.10 per share. There is no benefit to getting 10,000 shares or 10 shares for your $1,000. Your goal is to invest in companies that have valuable products and services run by competent management teams. Sure, the number of shares you own will dictate what percentage of the company you own, and in a number of cases, your voting power. But even a penny stock will have a market capitalization of several million dollars so voting power isn't really a concern for your $1,000 investment. There is a lot more in the three basic financial statements (Income Statement, Balance Sheet, Statement of Cash Flows) than revenue. Seasoned accountants can have a hard time parsing out where money is coming from and where it's going. In general there are obvious red flags, like a fast declining cash balance against a fast growing liabilities balance or expenses exceeding revenue. While some of these things are common among new and high growth companies, it's not the place for a new investor with a small bankroll. A micro-cap company (penny stocks are in this group) will receive rounds of financing via issuing preferred convertible shares which may include options on more shares. For a company worth $20mm a $5mm financing round can materially change the finances of a company, and will likely dilute your holdings in common stock. Small growth companies need new financing frequently to fund their growth strategies. Revenue went up, great... why? Did you open another store? Did you open another sales office? Did the revenue increase this quarter based on substantially the same operation that existed last quarter or have you increased the capacity of your operation? If you increased the capacity of your operation what was the cost of the increase and did revenue increase as expected? Can you expect revenue to continue to grow at this rate or was it a one time windfall from an unusual order? Sure, there are spectacular gains to be had in penny stocks. XYZ Pharma Research (or whatever) goes from $0.05 to $0.60 and you've turned your $1,000 in to $12,000. This is a really unlikely event... Buying penny stocks is akin to buying lottery tickets. Unless you are a high ranking employee at the company capable of making decisions, or one of the investors buying the preferred shares mentioned in point 3, or are one of the insiders of a pump and dump scam on the stock, penny common stocks are not a place to invest. One could argue that even a company insider should probably avoid buying common stock. Just to illustrate the points above, you mention: Doing some really heavy research into this stock has made me question the whole penny stock market. Based on your research what is the enterprise value of the company? What were the gross proceeds of the last financing round, how many shares were issued and were there any warrants attached? What do you perceive to be heavy research? What background do you have in finance/accounting to give weight to your ability to perform such research? Crawl. Walk. Then run. Don't kid yourself in to thinking that since you have some level of education you understand the contracts involved in enterprise finance.", "title": "" }, { "docid": "d4c78c4740acac8a3570672723509ad4", "text": "looking over some historical data I cannot really a find a case where a stock went from $0.0005 to $1 it almost seem that once a stock crosses a minimum threshold the stock never goes back up. Is there any truth to that? That would be a 2000X (200,000%) increase in the per-share value which would be extraordinary. When looking at stock returns you have to look at percentage returns, not dollar returns. A gain of $1 would be minuscule for Berkshire-Hathaway stock but would be astronomical for this stock,. If the company is making money shouldn't the stock go up? Not necessarily. The price of a stock is a measure of expected future performance, not necessarily past performance. If the earnings had been more that the market expected, then the price might go up, but if the market sees it as an anomaly that won't continue then there may not be enough buyers to move the stock up. looking at it long term would it hurt me in anyway to buy ~100,000 shares which right now would run be about $24 (including to fee) and sit on it? If you can afford to lose all $24 then no, it won't hurt. But I wouldn't expect that $24 to turn into anything higher than about $100. At best it might be an interesting learning experience.", "title": "" }, { "docid": "a36ee337e2db9cb3136d74beb8113185", "text": "The company released its 2nd Quarter Revenue of $1,957,921 a couple days ago however the stock did not move up in any way. Why? If the company is making money shouldn't the stock go up. But that result doesn't indicate that the company is making money. The word for making money is profit, not revenue. Profit equals revenue minus costs. An increasing revenue could mean decreasing profits. For example, marketing expenses could eat up the entirety of the new revenue. This is one of the most basic aspects of researching stocks. If you are having trouble with this, you might find yourself better suited to invest in mutual funds, where they do this research for you. In particular, the safest kind of mutual funds for an inexperienced investor are index funds that track a major index, like the S&P 500. Another issue is that stock prices aren't based on historical results but on expected future results. Many a company has reported smaller than expected profits and had their price fall even though profits increased from previous results. Looking at it long term would it hurt me in anyway to buy ~100,000 shares which right now would run be about $24 (including to fee) and sit on it? It would cost you $24. You might get a return some day. Or you might waste your money. Given the comparatively large upside, the consensus seems to be that you will probably waste your money. That said, it's not a lot of money to waste. So it won't hurt you that much. The most likely result remains that the company will go bankrupt, leaving your stock worthless.", "title": "" }, { "docid": "177520afa3ba3c94f80b068568d73cc0", "text": "\"Note that we do not comment on specific stocks here, and have no place doing so. If your question is only about that specific stock then it is off topic. I have not tried to answer that part below. The key to valuation is predicting the net present value of all of a company's cash flows; i.e. of their future profits and losses. Through a number of methods to long to explain here investment banks and hedge funds work out what they expect the company's cash flows to be and trade so that these future profits, losses etc. are priced into the stock price. Since future cash flows, profits or whatever you want to call them are priced in, the price of a stock shouldn't move at all on an earnings statement. This begs the question \"\"why do some stock prices move violently when they announce earnings?\"\" The models that the institutional investors use are not perfect and cannot take into account everything. An unexpected craze for a product or a supply chain agreement breaking down on not being as good as it seems will not be factored into this pricing and so the price will move based on the degree to which expectation is missed or exceeded. Since penny socks are speculative their value is based far more on the long term expected cash flows and less on the short run cash flows. This goes a long way to explaining why some of the highest market capitalisation penny stocks are those making consistent losses. This means that they can be far less susceptible to price movements after an earnings announcement even if it is well out of the consensus range. Higher (potential) future value comes with the higher risks of penny stocks which discounts current value. In the end if people's expectation of the company's performance reflects reality then the profitability is priced in and there will be no price movement. If the actuality is outside of the expected range then there will be a price movement.\"", "title": "" }, { "docid": "e0032eafca184fb6973d7d72b2f60f85", "text": "If you believe in the efficient market hypothesis then the stock price reflects the information known to market participants. Consequently, if the 'market' expected earnings to rise, and they did, then the price won't change. Clearly there are circumstances, especially in the short term and for illiquid stocks, where this isn't true, but a lot of work points to this being the case on average.", "title": "" }, { "docid": "9e358688d39c4c6a8e315a4c826146db", "text": "\"The company released its 2nd Quarter Revenue of $1,957,921 a couple days ago however the stock did not move up in any way. Why? If the company is making money shouldn't the stock go up. During the time between earnings announcements, analysts occasionally publish their assessment of a company, including their estimate of the company's value and future earnings. And as part of an earnings report, companies often include \"\"guidance\"\": their prediction for the upcoming quarter (this will frequently be a conservative estimate, so they're more likely to achieve it). Investors make their purchase and sale decisions based on this information. When the earnings report comes out, investors compare these actual returns to analysts' predictions and the company's guidance. If their results are in line with these predictions, the stock price is unlikely to move much, as those results are already incorporated into the stock price. If the company is doing better than predicted, it's usually a good sign, and the price often rises; conversely, if it's doing worse, the price will likely fall. But it's not as simple as this. As others have explained, for long-term investors, stock prices are based on expectations of future activity. If the results of that quarter include some one-time actions that are unlikely to repeat, investors will often discount that portion.\"", "title": "" } ]	[ { "docid": "b630929af30262fb03a36642052d7bd0", "text": "Stock prices are set by the market - supply and demand. See Apple for example, which is exactly the company you described: tons of earnings, zero dividends. The stock price goes up and down depending on what happens with the company and how investors feel about it, and it can happen that the total value of the outstanding stock shares will be less than the value of the underlying assets of the company (including the cash resulted from the retained earnings). It can happen, also, that if the investors feel that the stock is not going to appreciate significantly, they will vote to distribute dividends. Its not the company's decision, its the board's. The board is appointed by the shareholders, which is exactly why the voting rights are important.", "title": "" }, { "docid": "fefbfd0d0f389f36234a8dfca1e4479a", "text": "Let's say the company has a million shares valued at $10 each, so market caps is $10 million dollar = $10 per share. Actual value of the company is unknown, but should be close to that $10 million if the shares are not overvalued or undervalued. If they issue 100,000 more shares at $10 each, the buyers pay a million dollar. Which goes into the bank account of the company. Which is now worth a million dollar more than before. Again, we don't know what it is worth, but the market caps should go up to $11 million dollar. And since you have now 1,100,000 shares, it's still $10 per share. If the shares are sold below or above $10, then the share price should go down or up a bit. Worst case, if the company needs money, can't get a loan, and sells 200,000 shares for $5 each to raise a million dollars, there will be suspicion that the company is in trouble, and that will affect the share price negatively. And of course the share price should have dropped anyway because the new value is $11,000,000 for $1,200,000 shares or $9.17 per share.", "title": "" }, { "docid": "69997fc43a30d7d136f11e2c6cccf3ba", "text": "Initially, Each company has 10k shares. Company B has $500k money and possibly other assets. Every company has stated purpose. It can't randomly buy shares in some other firm. Company A issued 5k new shares, which gives it $500k money. Listed companies can't make private placements without regulatory approvals. They have to put this in open market via Public issue or rights issue. Company B does the same thing, issuing 5k shares for $500k money. Company A bought those 5k shares using the $500k it just got There is no logical reason for shareholder of Company B to raise 5K from Company A for the said consideration. This would have to increase.", "title": "" }, { "docid": "442ed4cce3fedeeeb99c73feb326f40b", "text": "Not necessarily. You only need to raise prices to maintain current profit margins. Assuming you aren't living on a paper thin profit margin, you can give your employees a raise and suffer a lower profit margin. Now, that could have other negative consequences on your stock value and shareholders might be upset, but that is a different discussion.", "title": "" }, { "docid": "5f818a172800ab3e8c4068baf50271cc", "text": "The short answer to your question is yes. Company performance affects stock price only through investors' views. But note that selling for higher and lower prices when the company is doing well or poorly is not an arbitrary choice. A stock is a claim on the future cash flows of the firm, which ultimately come from its future profits. If the company is doing well, investors will likely expect that there will large cash flows (dividends) in the future and be willing to pay more to hold it (or require more to sell it). The price of a stock is equal what people think the future dividends are worth. If market participants started behaving irrationally, like not reacting to changes in the expected future cash flows, then arbitrageurs would make a ton of money trading against them until the situation was rectified.", "title": "" }, { "docid": "3226b984a2e3f7ed89feb25f3e373bf9", "text": "\"Probably the biggest driver of the increased volumes that day was a change in sentiment towards the healthcare sector as a whole that caused many healthcare companies to experience higher volumes ( https://www.bloomberg.com/press-releases/2017-07-11/asset-acquisitions-accelerate-in-healthcare-sector-boosting-potential-revenue-growth ). Following any spike, not just sentiment related spikes, the market tends to bounce back to about where it had been previously as analysts at the investment banks start to see the stock(s) as being overbought or oversold. This is because the effect of a spike on underlying ratios such as the Sharpe ratio or the PE ratio makes the stock look less attractive to buyers and more attractive to sellers, including short sellers. Note, however, that the price is broadly still a little higher than it was before the spike as a result of this change in sentiment. Looking at the price trends on Bloomberg (https://www.bloomberg.com/quote/CDNA:US) the price had been steadily falling for the year prior to the spike but was levelling out at just over $1 in the few months immediately prior to the spike. The increased interest in the sector and the stock likely added to a general change in the direction of the price trend and caused traders (as opposed to investors) to believe that there was a change in the price trend. This will have lead to them trading the stock more heavily intraday exacerbating the spike. Note that there traders will include HFT bots as well as human traders. You question the legality of this volume increase but the simple answer is that we may never know if it was the target of traders manipulating the price or a case of insider trading. What we can see is that (taking \"\"animal spirits\"\" into account) without any evidence of illegality there are plenty of potential reasons why the spike may have occurred. Spikes are common where traders perceive a change in a trend as they rush to cash in on the change before other traders can and then sell out quickly when they realise that the price is fundamentally out of sync with the firm's underlying position. You yourself say that you have been watching the stock for some time and, by that fact alone, it is likely that others are for the same reasons that you are. Otherwise you wouldn't be looking at it. Where people are looking at a stock expecting it to take off or drop you expect volatility and volatility means spikes!\"", "title": "" }, { "docid": "69e4603c713071cd9e01609a98732949", "text": "Stock trading (as opposed to IPO) doesn't directly benefit the company. But it affects their ability to raise additional funds; if they're valued higher, they don't need to sell as many shares to raise a given amount of money. And the stockholders are part owners of the company; their votes in annual corporate meetings and the like can add up to a substantial influence on the company's policies, so the company has an interest in keeping them (reasonably) happy. Dividends (distributing part of the company's profits to the stockholders) are one way of doing so. You're still investing in the company. The fact that you're buying someone else's share just means you're doing so indirectly, and they're dis-investing at the same time.", "title": "" }, { "docid": "34cde1e8bd12eb8855f66997fb014b0c", "text": "Without reading the source, from your description it seems that the author believes that this particular company was undervalued in the marketplace. It seems that investors were blinded by a small dividend, without considering the actual value of the company they were owners of. Remember that a shareholder has the right to their proportion of the company's net value, and that amount will be distributed both (a) in the form of dividends and (b) on liquidation of the company. Theoretically, EPS is an indication of how much value an investor's single share has increased by in the year [of course this is not accurate, because accounting income does not directly correlate with company value increase, but it is a good indicator]. This means in this example that each share had a return of $10, of which the investors only received $1. The remainder sat in the company for further investment. Considering that liquidation may never happen, particularly within the time-frame that a particular investor wants to hold a share, some investors may undervalue share return that does not come in the form of a dividend. This may or may not be legitimate, because if the company reinvests its profits in poorer performing projects, the investors would have been better off getting the dividend immediately. However some value does need to be given to the non-dividend ownership of the company. It seems the author believes that investors failing to consider value of the non-dividend part of the corporation's shares in question led to an undervaluation of the company's shares in the market.", "title": "" }, { "docid": "13741d54162a9c82b58e040a60a81243", "text": "There are two main ways you can make money through shares: through dividends and through capital gains. If the company is performing well and increasing profits year after year, its Net Worth will increase, and if the company continues to beat expectations, then over the long term the share price will follow and increase as well. On the other hand, if the company performs poorly, has a lot of debt and is losing money, it may well stop paying dividends. There will be more demand for stocks that perform well than those that perform badly, thus driving the share price of these stocks up even if they don't pay out dividends. There are many market participants that will use different information to make their decisions to buy or sell a particular stock. Some will be long term buy and hold, others will be day traders, and there is everything in between. Some will use fundamentals to make their decisions, others will use charts and technicals, some will use a combination, and others will use completely different information and methods. These different market participants will create demand at various times, thus driving the share price of good companies up over time. The annual returns from dividends are often between 1% and 6%, and, in some cases, up to 10%. However, annual returns from capital gains can be 20%, 50%, 100% or more. That is the main reason why people still buy stocks that pay no dividends. It is my reason for buying them too.", "title": "" }, { "docid": "e1574c4d21cc1b9e86643ae46e4b73c1", "text": "\"It means that the company earned 15 cents per share in the most recently reported quarter. Share price may or not be affected, depending on how buyers and sellers value the company. Just because profits \"\"jumped,\"\" does not mean the shares will follow suit. An increase in profits may have already been priced into the stock, or the market expected the increase in profit to be even higher. As the shareholder, you don't actually get any of these profits into your hands, unless the company pays out a portion of these profits as a dividend.\"", "title": "" }, { "docid": "96085ed5e9764b4c6311102d80047902", "text": "Ideally, stock price reflects the value of the company, the dividends it is expected to pay, and what people expect the future value of the company to be. Only one of those (maybe one and a half) is related to current sales, and not always directly. Short-term motion of a stock is even less directly linked, since it also reflects previous expectations. A company can announce disappointing sales and see its stock go up, if the previous price was based on expecting worse news.", "title": "" }, { "docid": "b152e7bee118585712db496fe8c45a9d", "text": "There are a few reason why share prices increase or decrease, the foremost is expectation of the investors that the company/economy will do well/not well, that is expectation of profit/intrinsic value growth over some time frame (1-4 qtrs.)there is also demand & supply mismatch over (usually) short time. If you really see, the actual 'value' of a company is it's net-worth (cash+asset+stock in trade+brand value+other intangibles+other incomes)/no of shares outstanding, which (in a way) is the book value, then all shares should trade at their book value, the actual number but it does not, the expectation of investors that a share would be purchased by another investor at a higher price because the outlook of the company over a long time is good.", "title": "" }, { "docid": "04981ace31d06259a6ce292baf8a6279", "text": "I expected a word or two on the price elasticity of demand here :) Andrey, Your question needs slight revision in its current form. Rising prices actually do not mean increased profitability for a company. The quantity they sell also pays a huge part and actually is correlated to the price at which they sell the goods (and other factors such as the price at which their competitor sells the goods etc., but we will ignore it for simplicity). The net profit of sales for any firm is equal to (Qty x Sale Price) - COGS - SG&A - taxes - other expenses where, COGS means cost of goods sold SG&A means sales, general and admin costs (e.g., cleaning the inventory storage area daily so that the goods stay fresh etc.) other expenses include any miscellaneous other costs that the firm incurs to make the sale. Now, if everything in that equation remains same (COGS, SG&A, taxes, and other expenditures), rising prices will only translate into a higher profit if the quantity does not fall by the same margin. Prices may also rise simply as a response to risking COGS, SG&A or other expenditures --the latter may be observed in inflationary environments. In such a case, the supplying firm can end up losing its profit margin if the quantity falls by more than the price rise.", "title": "" }, { "docid": "bd59a0d6be04b9e7ff8cc04436d98108", "text": "\"What does it mean in terms of share price? Should the share price increase by 15 cents? No, but you're on the right track. In theory, the price of a share reflects it's \"\"share\"\" of time discounted future earnings. To put it concretely, imagine a company consistently earning 15 cents a share every year and paying it all out as dividends. If you only paid 25 cents for it, you could earn five cents a share by just holding it for two years. If you imagine that stocks are priced assuming a holding period of 20 years or so, so we'd expect the stock to cost less than 3 dollars. More accurately, the share price reflects expected future earnings. If everyone is assuming this company is growing earnings every quarter, an announcement will only confirm information people have already been trading based on. So if this 15 cents announcement is a surprise, then we'd expect the stock price to rise as a function of both the \"\"surprise\"\" in earnings, and how long we expect them to stay at this new profitability level before competition claws their earnings away. Concretely, if 5 cents a share of that announcement were \"\"earnings surprise,\"\" you'd expect it to rise somewhere around a dollar.\"", "title": "" }, { "docid": "340b75b1e37eecd052b891c6d5bbe629", "text": "Inflation can be a misleading indicator. Partly because it is not measured as a function of the change in prices of everything in the economy, just the basket of goods deemed essential. The other problem is that several things operate on it, the supply of money, the total quantity of goods being exchanged, and the supply of credit. Because the supply of goods divides - as more stuff is available prices drop - it's not possible to know purely from the price level, if prices are rising because there's an actual shortage (say a crop failure), or simply monetary expansion. At this point it also helps to know that the total money supply of the USA (as measured by total quantity of money in bank deposits) doubles every 10 years, and has done that consistently since the 1970's. USA Total Bank Deposits So I would say Simon Moore manages to be right for the wrong reasons. Despite low inflation, cash holdings are being proportionally devalued as the money supply increases. Most of the increase, is going into the stock market. However, since shares aren't included in the measures of inflation, then it doesn't influence the inflation rate. Still, if you look at the quantity of shares your money will buy now, as opposed to 5 years ago, it's clear that the value of your money has dropped substantially. The joker in the pack is the influence of the credit supply on the price level.", "title": "" } ]	fiqa
ed73dfae46cd118e4118a77091d7bee8	Calculate investment's interest rate to break-even insurance cost [duplicate]	[ { "docid": "d2fbc5dc05a3d6d3b2e81994ca5c3e12", "text": "I believe the following formula provides a reasonable approximation. You need to fill in the following variables: The average annual return you need on investing the 15% = (((MP5 - MP20) * 12) + (.0326 * .95 * PP / Y)) / (PP *.15) Example assuming an interest rate of 4% on a 100K home: If you invest the $15K you'll break even if you make a 9.86% return per year on average. Here's the breakdown per year using these example numbers: Note this does not consider taxes.", "title": "" }, { "docid": "e87cf009a427c288022fcb9eaf253bed", "text": "You are comparing a risk-free cost with a risky return. If you can tolerate that level of risk (the ups and downs of the investment) for the chance that you'll come out ahead in the long-run, then sure, you could do that. So the parameters to your equation would be: If you assume that the risky returns are normally distributed, then you can use normal probability tables to determine what risk level you can tolerate. To put some real numbers to it, take the average S&P 500 return of 10% and standard deviation of 18%. Using standard normal functions, we can calculate the probability that you earn more than various interest rates: so even with a low 3% interest rate, there's roughly a 1 in 3 chance that you'll actually be worse off (the gains on your investments will be less than the interest you pay). In any case there's a 3 in 10 chance that your investments will lose money.", "title": "" }, { "docid": "a7d5b691576bed42753b3bcb59f598f8", "text": "I wouldn't call it apples and oranges. This is literally an opportunity cost calculation. You can safely assume S&P500 will perform at least 11% over any 10 year period. Since failing companies are delisted and replaced with new growing companies, the market should continue to grow. No, it's not guaranteed. Lets use an aggressive number for inflation, 4%, leaving a 7% ROR estimate for S&P500. I assume OP has better credit than me, assume a rate around 3.5%. So it looks like net 3.5% ROR. The PMI erases that. You have to continue paying it until you pay off the loan. Put 20% down, get a 15 year fixed at lowest rate. Pay it off quicker.", "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": "772da6197e39317935aba6165983c49b", "text": "\"The question that I walk away with is \"\"What is the cost of the downside protection?\"\" Disclaimer - I don't sell anything. I am not a fan of insurance as an investment, with rare exceptions. (I'll stop there, all else is a tangent) There's an appeal to looking at the distribution of stock returns. It looks a bit like a bell curve, with a median at 10% or so, and a standard deviation of 15 or so. This implies that there are some number of years on average that the market will be down, and others, about 2/3, up. Now, you wish to purchase a way of avoiding that negative return, and need to ask yourself what it's worth to do so. The insurance company tells you (a) 2% off the top, i.e. no dividends and (b) we will clip the high end, over 9.5%. I then am compelled to look at the numbers. Knowing that your product can't be bought and sold every year, it's appropriate to look at 10-yr rolling returns. The annual returns I see, and the return you'd have in any period. I start with 1900-2012. I see an average 9.8% with STD of 5.3%. Remember, the 10 year rolling will do a good job pushing the STD down. The return the Insurance would give you is an average 5.4%, with STD of .01. You've bought your way out of all risk, but at what cost? From 1900-2012, my dollar grows to $30080, yours, to $406. For much of the time, treasuries were higher than your return. Much higher. It's interesting to see how often the market is over 10% for the year, clip too many of those and you really lose out. From 1900-2012, I count 31 negative years (ouch) but 64 years over 9.5%. The 31 averaged -13.5%, the 64, 25.3%. The illusion of \"\"market gains\"\" is how this product is sold. Long term, they lag safe treasuries.\"", "title": "" }, { "docid": "01d88eba80895040dd663fec951a0435", "text": "R = I ^ P R = return (2 means double) I = (Intrest rate / 100) + 1 [1.104 = 10.4%] P = number of periods (7 years) 2 = 1.104 ^ 7 (you double your money in seven years with a yearly Intrest rate of 10.4%) I = R^(1/P) 1.104 = 2^(1/7) P = log(R) / log(I) 7 = log(2) / log(1.104)", "title": "" }, { "docid": "0068be76f8e30082d3ecc91d92b35add", "text": "This calculation arrives at the correct answer. However, it uses the formula for an annuity due. This means the payments are made at the beginning of the month and the last month of the 10 year period has interest accrued. See the section, Calculating the Future Value of an Annuity Due. The rate is given as an effective rate. with In Excel, =FV((1+0.12)^(1/12)-1,120,3500,0,1)", "title": "" }, { "docid": "8bff6260a6a7c709a5caed50d58fbe1e", "text": "The total number of shares on April 1st is 100 + 180 + 275 = 555. The price on April 1st is required. The current price is stated as $2, but $2 * 555 = $1110 and the current fund values is stated as $1500. Opting to take the current value as $1500, the price on April 1st can be calculated as $1500/555 = $2.7027. The amounts invested as number of shares x share price are: (Note these investment amounts do not match the example scenario's investment amounts, presumably because the example numbers are just made up.) The monthly returns can be calculated: The current values for each investor as invested amount x returns are: Checking the total:", "title": "" }, { "docid": "80a85c95c7462ad01c4b710df507a311", "text": "\"Hello! I am working on a project where I am trying to determine the profit made by a vendor if they hold our funds for 5 days in order to collect the interest on those funds during that period before paying a third party. Currently I am doing \"\"Amount x(Fed Funds Rate/365)x5\"\" but my output seems too low. Any advice?\"", "title": "" }, { "docid": "80a3495c6c0a5f6b3d73ef55bcf2b348", "text": "Calculate the theoretical forward price using covered interest parity, then compare it to the actual forward price of $1.04/euro. Buy the cheap one and sell the expensive one (this will involve borrowing dollars or euros at the US or Euro interest rate to buy the other currency and longing or shorting the 6-month forward to perfectly hedge your currency exposure).", "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": "ecd4cb3dacf846a7498338c3ce7b3dee", "text": "This investment does not have a payback period as the net present value of your investment is negative. Your investment requires an initial cash outlay of $40,000 followed by annual savings of $2060 for the next 20 years. Your discount rate is 5% at which the NPV is $-14327.85 as calculated below by using this JavaScript financial functions library tadJS that is based on a popular tadXL add-in for Excel 2007, 2010 and 2013.", "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": "fff6e6b97a0c55da6cafd3bb3c6882c0", "text": "I asked this question in another sub, but I thought I might also get answers here. I was just wondering how pension funds or investment firms calculate the interest that they give to their members or clients in the US, or whichever country you are from. I ask this because I have a gut feeling that the national pension fund in my country does it the wrong way and is basically cheating people, so I wanted to make a comparison with other countries. Forgive me if I'm wrong and there's nothing to worry about. OK, so what they do is collect money in a given financial year, which starts in July and ends in June. Let's say they collect 100 million in 2010-11. They then invest this 100 million in the year July 2011 - June 2012. After deducting admin costs and all that, interest for this 2010-11 money is declared on October 1st 2012. That basically means that money someone contributed in July 2010 will earn interest 2 years later in 2012! I just feel like that is not how it should be done, but you can correct me if I'm wrong. They also regularly give interest at about 12% which is good when I read about interest rates in the US being around 7%, but I feel like since this interest is basically announced after 2 years, that 12% isn't as good as it seems. Someone help me understand if I'm wrong. Thanks.", "title": "" }, { "docid": "5887589fd2f004e5ffadf2a922b01929", "text": "Im creating a 5-year projection on Profit and loss, cash flow and balance sheet and i\\m suppose to use the LIBOR (5 year forward curve) as interest rate on debt. This is the information i am given and it in USD. Thanks for the link. I guess its the USD LIBOR today, in one year, in two years, three years, four years and five years", "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": "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": "06724d4ce9c252533e99ccea2c29973c", "text": "If I is the initial deposit, P the periodic deposit, r the rent per period, n the number of periods, and F the final value, than we can combine two formulas into one to get the following answer: F = I(1+r)n + P[(1+r)n-1]/r In this case, you get V = 1000(1.05)20 + 100[(1.05)20-1]/0.05 = 5959.89 USD. Note that the actual final value may be lower because of rounding errors.", "title": "" } ]	fiqa
0cf0582ce94bdb0cc8c87db171ebfb58	Can my rent to own equity be used as a downpayment?	[ { "docid": "d1ccea21c553d6fdbf534fdb0d965a54", "text": "The home owner will knock 20% off the price of the house. If the house is worth $297K, then 20% is just a discount your landlord is offering. So your actual purchase price is $237K, and therefore a bank would have to lend you $237K. Since the house is worth more than the loan, you have equity. 20% to be more accurate. Another way to say is, the bank only wants to loan you 80% of the value of the item securing the loan. If you default on day one, they can sell the house to somebody else for $296K and get a 20% return on their loan. So this 20% you are worried about isn't actually money that anybody gives anybody else, it is just a concept.", "title": "" }, { "docid": "37ed914eade031022145bd219bbcf1e4", "text": "I think you need to go to a local bank and ask. The key thing is paper trail. For any mortgage I've gotten on a new purchase, the bank needs to see where the down payment came from and how it got to the seller. In this case, it can go either way. If the value is truly 100% to the 80% you are looking to finance, and the paper trail is legit, this may work just fine. The issue others seem to have is that simply buying at a 20% discount is not a legit way to finance the 80%. Here, it appears to me that the 20% came from you in installments, via the rent.", "title": "" }, { "docid": "c15d3750705dbbdb5af681e0a9faca91", "text": "I do not think the bank would consider the 52K as equity. Typically, a rent-to-own lease is technically a lease-option contract where you lease for a fixed amount and at some point during the lease you have the option to buy it at a discounted price. I think the bank would consider it a negotiated price. I know that those down payment assistance plans are considered price negotiation by the IRS for the purpose of basis cost and I suspect this would be similar where your basis is $236,800 and not $296,000.", "title": "" } ]	[ { "docid": "ee0f29ce70781de82cc27060603a7487", "text": "You'll be taxed when you sell the house, but not before that (or if you do some other transaction that realizes the gain, talk to your real estate attorney or accountant for more details). A Home Equity line-of-credit is simply a secured loan: it's a loan, conditioned on if you fail to pay it back, they have a lien on your house (and may be able to force you to sell it to pay the loan back).", "title": "" }, { "docid": "997ffcf0eb3fb67c5b69f9379e46ed51", "text": "If you can get a mortgage with 10% downpayment and the seller will accept (some may want at least 20% downpayment for whatever reasons) and with PMI it still lower than your rent, sounds like it's a good idea to buy now. Of course this assumes that the money you'd be otherwise saving for 20% downpayment will be used to pay off a mortgage faster.", "title": "" }, { "docid": "91efd15284b5feb071813dda505628cb", "text": "I've investigated this, and banks are willing to offer a deal similar to what you ask. You would take out a securities-backed loan, which provides you with the down payment on the property. For the remainder, you take out a regular mortgage. JAGAnalyst wonders why banks would accept this. Simple: because there's money to be made, both on the securities-backed loan and the mortgage. Both parts of the deal are financially sound from the banks perspective. Now, the 20% number is perhaps a bit low. Having 20% of the value in shares means you'd be able to get a loan for 50% of that, so only a 10% downpayment.", "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": "18a4acfd33c5b0a9aca4a2a2e35d466f", "text": "The issue here is that the transaction (your funds to her account) looks very similar to the rent payments which you plan to make in the future. Those rental payments (if deemed to be commercial) would normally be subject to tax. Consider the scenario where rather than an up front $5000, and $5000 over 2 years, you paid her $10000, and paid no rent. That might be an attempt to avoid paying tax. A commercial transaction can't be re-labeled as a gift just based on your election - the transaction needs to be considered as a whole. However, an interest free, unsecured loan connected with you paying rent at market rate would be (depending on local laws) simply foolish (to some extent). I don't think you are able to structure the transaction as a joint purchase (since the mortgage will prevent her from allocating a part of the property to you). Its also likely that you can live in her house and contribute an adequate amount to the household costs without creating a taxable income for her. For example in the UK, up to ~£4000 pa rental income generated from the property in which you reside does not need to be declared. You need to identify the scenarios where your particular arrangement could be imagined as resulting in a taxable or potentially taxable event - then make sure you are not avoiding those events just by choosing how you label the events.", "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": "da704574752205e27128f2f8b909fbb8", "text": "First, this was never an arrangement for you to build equity, this was an arrangement for them to speculate on another house under the guise of teaching you a life lesson like responsibility or something contrived. The only way you profit from this is if the value of the house goes up and you sell it. You get 25% of the proceeds, maybe. If this was an equitable arrangement then they would be paying 75% of the property taxes and a little more for your maintenance efforts.", "title": "" }, { "docid": "1996cb63df62a460f6fbd2a182ca33f5", "text": "Also you would need to consider any taxation issues. As he will be paying you rent you will need to include this as income, plus any capital gains tax on the re-sale of the property may need to be paid.", "title": "" }, { "docid": "29f5f16def88e90faafd2ffce153b7d7", "text": "I doubt it. I researched it a bit when I was shopping for a HELOC, and found no bank giving HELOC for more than 80% LTV. In fact, most required less than 80%. Banks are more cautious now. If the bank is not willing to compromise on the LTV for the first mortgage - either look for another bank, or another place to buy. I personally would not consider buying something I cannot put at least 20% downpayment on. It means that such a purchase is beyond means.", "title": "" }, { "docid": "9ca323e13f071336a0d05518e08bf5a4", "text": "From personal experience: Loan Impact It does impact your ability to take out other loans (to an extent) Your first investment property is going to go against your debt to income levels, so if you take out a loan, you've essentially decreased the amount you can borrow before you hit a lender's debt to income ceiling. Two things about that: 1) I'm assuming you have a primary mortgage - if that's the case they will factor what you are already paying for your primary house + any car loans + any student loans, etc. Once you've successfully taken out a mortgage for your investment property, you're probably close to your debt to income ceiling for any other loans. 2) There is usually a 2 year time period where this will matter the most. Once you've rented out this property for 2 years, most financial institutions will consider a percentage of the rent as income. At this point you can then take on more debt if you choose. Other (Possibly Negative) Impacts and Considerations Maintenance Costs Renovations Turnovers Taxes and Insurance Downpayments and interest Income tax Advertising costs Property Management costs Closing costs and Legal fees Vacancies HOA fees Other (Possibly Positive) Impacts and Considerations Passive Income as long as the numbers are right and you have a good property manager Tax deductions (And depreciation) Rent has low correlation to the market Other investment alternatives: Stocks Reits (not directly comparable to investment properties) Long story short- can be a hassle but if the numbers are right, it can be a good investment. There's a series of articles further explaining these above listed components in detail.", "title": "" }, { "docid": "6db08e9c57536d8c60ef7bb2883c6aff", "text": "\"It depends on the deal: and you didn't give any details. That said, there are some things that stand out regardless, and some more specific answers to your questions. First, Mortgage rates (at the bank) are absurdly low right now. Like 4%-5%; less than 4% for excellent credit. You say your credit is ok, so unless your landlord is willing to do a deal where they get no benefit (beyond the price of the house), the bank is the way to go. If you don't have much for a down payment, go with an FHA loan, where you need only 3.5% down. Second, there is another option in between bank mortgage and rent-to-own. And that is that where your landlord \"\"carries the note\"\". Basically, there is a mortgage, and it works like a bank mortgage, but instead of the bank owning the mortgage, your landlord does. Now, in terms of them carrying all of it, this isn't really helpful. Who wants to make 3-4% interest? But, there is an interesting opportunity here. With your ok credit, you can probably get pretty close to 4% interest at the bank IF the loan is for 80% LTV (loan to value; that is, 20% equity). At 80% LTV you also won't have PMI, so between the two that loan will be very cheap. Then, your accommodating landlord can \"\"carry\"\" the rest at, say, 6-7% interest, junior to the bank mortgage (meaning if you default, the bank gets first dibs on the value of the house). Under that scenario, your over all interest payment is very reasonable, and you wouldn't have to put any money down. Now for your other questions: If we rent to own are we building equity? Not usually. Like the other posters said, rent-to-own is whatever both parties agree on. But objectively, most rent-to-own agreements, whether for a TV or a house, are set up to screw the buyer. Sorry to be blunt, and I'm not saying your landlord would do that, this is just generally how it is with rent to own. You don't own it till you make the last payment, and if you miss a payment they repo the property. There is no recourse because, hey, it was a rental agreement! Of course the agreements vary, and people who offer rent to own aren't necessarily bad people, but it's like one of those payday loan places: They provide a valid service but no one with other options uses them. If we rent to own, can we escape if we have to (read: can't pay anymore). Usually, sure! Think about what you're saying: \"\"Here's the house back, and all that money I paid you? Keep it!\"\" It's a great deal if you're on the selling side. How does rent to own affect (or not) our credit? It all depends on how it's structured. But really, it comes down to are they going to do reporting to the credit bureaus? In a rent-to-own agreement between individuals, the answer is no. (individuals can't report to a credit bureau. it's kind of a big deal to be set up to be able to do that)\"", "title": "" }, { "docid": "8a9db923f5454f64bb4e44d06c74908f", "text": "\"The loan is the loan, the down payment is not part of the loan. The principle amount owed on the loan at the beginning of the loan is the amount of the loan. If your loan amount is $390,000 then that's below the \"\"jumbo\"\" classification. Your down payment is irrelevant. Lenders may want or require 20% (or any other amount) down so the loan will meet certain \"\"loan to value\"\" ratio requirements. In the case of real estate the lenders in general want a 20% down side cushion before you're \"\"upside down\"\" (owe more than the home is worth). This is not unique to homes and is common in many secured lending instruments; like cars for example.\"", "title": "" }, { "docid": "fea9b1f4dbe119cd9b6056137450fc07", "text": "Yes, you can have a buy-to-let mortgage on a rental property at the same time as a residential mortgage on your own property. A lot of landlords do this. I wouldn't go expecting your rental property to contribute much to paying off your residential mortgage. Most of it will go on the various costs and fees of renting out a property (not least the buy-to-let mortgage!). The main financial benefit in the UK of owning a rental property with a substantial mortgage on it is that the value of the property goes up (in a rising market, which it normally seems to be).", "title": "" }, { "docid": "50d0b42ef54f328df9c633c45a1d2aba", "text": "No, you can't do this indefinitely. For one, you can't just take money out as home equity with no strings attached. The cash out is done as a loan (often a HELOC) or second mortgage and you have to make payments. The lender will always make sure you are able to afford the payments. At some point, you won't qualify for the loan because of insufficient income or too many previous liens on the property. While home values often go up, there's no guarantee. And your examples are more than a bit optimistic.", "title": "" }, { "docid": "9b5ad6c50ddd6f92617ff2bf39a2fb69", "text": "That may become complicated depending on the State laws. In some States (California for example), LLCs are taxed on gross receipts, so you'll be paying taxes on paying money to yourself. In other States this would be a no-op since the LLC is disregarded. So you need to check your State law. I assume the LLC is not taxed as a corporation since that would be really stupid of course, but if it is then it adds the complexity of the Federal taxes on top as well (corporate entity will pay taxes on your rent, and you'll pay taxes on your dividends to get the money back). The best option would be to take that property out of the LLC (since there's no point in it anyway, if you're the tenant).", "title": "" } ]	fiqa
e4b63677190f03f31d2e1b8920f11248	My ex sold our car that still had money owed	[ { "docid": "6375ca2adc112dc33b5be6b576328cda", "text": "It is a legal issue for two reasons. In the United States if both names were on the title both people would have had to sign the paperwork in order to transfer the title. If the car was collateral for the loan, then the bank would have had to be involved in the transaction. The portion of the check need to repay the loan would have had to have been made out to the bank. If the car was sold to a dealership, then paperwork must have been forged. If the car was sold to a person then it is possible that they were too naive to know what paperwork was required, but it is likely still fraud. You need legal advice to protect your money, and your credit score. They should also be able to tell you who needs to be contacted: DMV, the police, the dealership, the bank.", "title": "" }, { "docid": "08c4d4c92aee5b9fc110943ba0b7fdcb", "text": "This is not a finance issue, it is a legal one. You need to talk to a lawyer. To save your credit you can pay off the bank now and fight out the details with your ex later. The bank is still owed their money.", "title": "" } ]	[ { "docid": "0b039e3016ed2148944b6cd912d5ae2d", "text": "Your best bet would be to add your name to the title through the bank or have her sell it to you for the amount she owes then you get a loan for that amount like they said before. If you guys split up at this point she'll legally get to keep the car you've been paying for. You could apply for a new loan and have her cosign but it'll make your monthly payments higher. Have her sell you the car for the amount owed them you get a loan for that amount. Since you are together and you've been paying for it you won't lose any money and your monthly payments won't be expensive if you don't owe that much on the car. Pretty much having her sell it to you would be the smartest idea cause keeping Her name on the title will allow Her to legally drive away in your car if you split and you don't want that lol", "title": "" }, { "docid": "4df213786d0460d57a29a7a1b27d1624", "text": "The other person has to decide that they want to be wholly responsible for the loan, and they have to be able to qualify for the loan. They are in essence purchasing the car from you with the sale price being the remaining balance of the loan. You will then use the processed from the new loan to pay the old loan off completely. They will then take the bill of sale to the state DMV/MVA to register the car in their name. You should have them start with their bank for a new car loan.", "title": "" }, { "docid": "b90152e12b9beda4523a34625545dbca", "text": "\"Your son is in the right. But he broke the \"\"unwritten\"\" rules, which is why the car dealer is upset. Basically, cars are sold in the United States at a breakeven price. The car company makes ALL its money on the financing. If everyone bought \"\"all cash,\"\" the car companies would not be profitable. No one expected anyone, least of all your son, a \"\"young person,\"\" to pay \"\"all cash.\"\" When he did, they lost all the profit on the deal. On the other hand, they signed a contract, your son met all the FORMAL requirements, and if there was an \"\"understanding\"\" (an assumption, actually), that the car was supposed to be financed, your son was not part of it. Good for him. And if necessary, you should be prepared to back him up on court.\"", "title": "" }, { "docid": "85ef54507d2fada1a6364d888462df4f", "text": "I wouldn't give it a second thought. I'd get rid of the extra car and do everything I could in the following months to repay the emergency fund. Even without the interest payments, I'd consider getting rid of an unused car due to the very nature of a car being a depreciating asset that has insurance expenses and annual registration fees on top of that depreciation. The one exception to the above would be a classic car that was purchased for an investment that is always garaged and doesn't need to be registered for road use. I take it for granted that most people who can afford such investments don't need my advice about when to sell.", "title": "" }, { "docid": "d3e856d7e6912de3291f0bf813915525", "text": "\"You're supposed to be filling form 433-A. Vehicles are on line 18. You will fill there the current fair value of the car and the current balance on the loans. The last column is \"\"equity\"\", which in your case will indeed be a negative number. The \"\"value\"\" is what the car is worth. The \"\"equity\"\" is what the car is worth to you. IRS uses the \"\"equity\"\" value to calculate your solvency. Any time you fill a form to the IRS - read the instructions carefully, for each line and line. If in doubt - talk to a professional licensed in your state. I'm not a professional, and this is not a tax advice.\"", "title": "" }, { "docid": "e8e6c38c95e169f5d01c19699cb2e6f0", "text": "Update: here is a message the seller just sent me. Does this make sense? I spoke with my bank again and they explained it a little better for me. I guess how it works is they will print out something for you that is called an affidavit in lieu of title that states they are no longer the lein holder and to release it to you. You then take that to the dol and they get it put in your name. He says that's how they do it all the time. When we get to the bank, the teller just verifies the check and I deposit it and they release the funds to pay off the account and that's when you would get the paperwork. You would be there for the whole process so nothing is sketchy. Sorry it's such a pain, I didn't understand how that worked. We've never sold a car with a loan on it before.", "title": "" }, { "docid": "538680ffbeda237b411a08ebf7cd17fd", "text": "My assumption here is that you paid nearly 32K, but also financed about 2500 in taxes/fees. At 13.5% the numbers come out pretty close. Close enough for discussion. On the positive side, you see the foolishness of your decision however you probably signed a paper that stated the true cost of the car loan. The truth in lending documents clearly state, in bold numbers, that you would pay nearly 15K in interest. If you pay the loan back early, or make larger principle payments that number can be greatly reduced. On top of the interest charge you will also suffer depreciation of the car. If someone offered you 31K for the car, you be pretty lucky to get it. If you keep it for 4 years you will probably lose about 40% of the value, about 13K. This is why it is foolish for most people to purchase a new vehicle. Not many have enough wealth to absorb a loss of this size. In the book A Millionaire Next Door the author debunks the assumption that most millionaires drive new cars. They tend to drive cars that are pretty standard and a couple of years old. They pay cash for their cars. The bottom line is you singed documents indicating that you knew exactly what you were getting into. Failing any other circumstances the car is yours. Talking to a lawyer would probably confirm this. You can attempt to sell it and minimize your losses, or you can pay off the loan early so you are not suffering from finance charges.", "title": "" }, { "docid": "2bcff75efa64863edad934ea3a368296", "text": "\"You say \"\"it's expensive\"\". I'm going to interpret this as \"\"the monthly payments are too high\"\". Basically, you need to get your old loan paid off, presumably by selling the car you have now. This is the tough part. If you sold the car now, how much would you get for it? You can use Kelley Blue Book to figure out what the car is roughly worth. That's not a guarantee that it will actually sell for that much. Look in your local classifieds to see what similar cars are selling for. (Keep in mind that you will usually get less for your old car if you trade it in versus sell it yourself.) Now, if you owe more than your car is worth, you're in a really tight spot. If you don't get enough money when you sell it, you are still stuck with the remainder of the loan. In that case, it is usually best to just stick with the car you have, and be more cautious about payments and loan length the next time you finance a car. Penalties: Most car loans don't have any kind of early repayment penalty. However, you should check your loan paperwork just to make sure.\"", "title": "" }, { "docid": "0abf2d4619c289bdab3c1e7ba705521d", "text": "\"A repossessed automobile will have lost some value from sale price, but it's not valueless. They market \"\"title loans\"\" to people without good credit on this basis so its a reasonably well understood risk pool.\"", "title": "" }, { "docid": "9a5895bc8c4b6bd307eaeb467bf56f4e", "text": "You're not missing anything. Consumer protection in the US is very basic and limited, if at all. So if someone claims you owe them something, it would be really hard for you to prove otherwise unless you actually drag them to court. Especially if there actually was a relationship, and there probably is some paperwork to substantiate the claim. I suggest talking to a consumer issues attorney.", "title": "" }, { "docid": "f3796ebab3370b9916c28dc5d95cf556", "text": "An option that no one has yet suggested is selling the car, paying off the loan in one lump sum (adding cash from your emergency sum, if need be), and buying an old beater in its place. With the beater you should be able to get a few years out of it - hopefully enough to get you through your PhD and into a better income situation where you can then assess a new car purchase (or more gently-used car purchase, to avoid the drive-it-off-the-lot income loss). Even better than buying another car that you can afford to pay for is if you can survive without that car, depending on your location and public transit options. Living car free saves you not only this payment but gas and maintenance, though it costs you in public transit terms. Right now it looks as if this debt is hurting you more than the amount in your emergency fund is helping. Don't wipe out your emergency fund completely, but be willing to lower it in order to wipe out this debt.", "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": "" }, { "docid": "0f09cb2c3e9ddcfe9c173dc53f5c6e39", "text": "\"I would not concede your money to your dad IF he is really wronging you - and we need much more detail to tell. This is the first lesson in life that actually following up on \"\"wrong\"\" things will save you thousands of dollars throughout your adulthood. It is really easy to turn the other way and be out a few thousand dollars. Then the hospital overbills you and you let it go and so on. Follow up, it is your money. The laws behind this are pretty cut and dry. Basically if you put money into one account and only your money was touching the account then it is your money. As a minor this is an expectation and once your turn 18 in the US you have a right to your money. That is given that the money was in the account at 18. So if your dad truly did not touch the account and withdraw the money before you turned 18, it is cut and dry. If your dad took money out before 18 or added his own money to the account it gets rather fuzzy since it is easy for dad to say that I took money out for your expenses. As for this being \"\"nuclear\"\" as keshlam suggests - he is right. His advice is fine but sets you up for people taking advantage of your throughout your life, especially your family. In fact the situation is already nuclear but you were the only thing the bomb hit. So talk to your dad. Explain that you will have to go and file a small claims trial if he does not agree to give you the money. If your situation is already over the top I would bring the paperwork with you filled out. (a person at your local clerk's office will help you find the right forms) You on the other hand better weigh this conversation. We \"\"internet peoples\"\" are only hearing one side of the story. We do not understand your situation at your home. We don't understand who pays for your car, gas, clothes, and room and board. You are 18, so there is no obligation for parents to pay for these things. If I had an 18 year old that had 3K in the bank under my name and they hadn't helped around the house in a year, didn't buy their car, had a poor attitude, and so on I would probably have the same action as your dad. Yea it's \"\"your money\"\" but is it really? When I was 18 I bought ALL my clothes, bought my car, bought my gas/insurance, and so on. I paid for my toothpaste. If this is where you are at and you help out around the house like an adult would then you have solid ground to stand on. If not... I would laugh if I were your dad. My first thought would be you want your money, that is fine. But you are paying rent. Car is gone, get your own. You would be paying for everything. But you would have \"\"your money\"\". So you have some pros and cons to weigh here and taking the money could cost you a TON of money in the future. However if your dad is just being a pure jerk (I kind of doubt this but who knows) then you have an obligation to fight for what is yours. (Note that the end goal of any meeting like this in your life shouldn't be court. It should be an agreement so that the right action is taken and both parties are happy. It could be very well that your dad would be happy with something that has nothing to do with the money. Also there are people with really really bad situations at their homes. A controlling parent is a pretty good \"\"bad\"\" situation and an easy one to solve at 18 - move out. If you don't want to move out then accept your family members, not complain about them. No matter how controlling your dad is your question spews of ungrateful teenager. I am sure you aren't that bad and I am sure your dad isn't that bad.) (And another note: In no way, shape, or form am I suggesting you drop the money issue. There is nothing worse than not talking about it even if you think your dad will kick you out of the house. Resentment building up in yourself or family is the worst possible thing. This needs to be dealt with.)\"", "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": "b9163909faf0e851b11ea3ac43905670", "text": "How's your savings and emergency fund? Everyone should have an emergency fund that will last them 6 months, and the goal should be two years' worth. This should be in an easily accessible account, such as a savings or money market account at your bank (you could consider CDs, but unless you're laddering them there will be penalties to get at the money). Once you've got 6 months' worth saved, the next thing to focus on is a tax advantaged retirement account. Only when you've maxed out your contributions (and the tax benefits) should you consider other investments. After all, those tax benefits are free money from Uncle Sam :)", "title": "" } ]	fiqa
be3fe0540009a3dfaa99c278cfebd4e0	How can I get a home loan within 2 years of bankruptcy?	[ { "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": "3519245e2bbed46d3af790588ad319f8", "text": "There are a few loan programs that grant exceptions to bankruptcy requirements in the event of extenuating circumstances that can be proven to be outside of your control (i.e. massive medical bills that you used bankruptcy to settle, etc.) however, in order to make the case for this exemption, you would need to make a strong case for your solvency, shown the ability to re-establish your credit reputation since the discharge of your bankruptcy, and would almost certainly have to go through a bank that offers manual underwriting. Additionally, if you are Native American, the HUD-184 program is a great option for your situation as it allows for a wide latitude in terms of underwriter discretion and is always manually underwritten as there is no automated underwriting system developed for the loan program. There are several great lenders that offer nationwide financing (as long as you're in a HUD-184 eligible area) and would be a great potential solution if you meet the qualifying parameter of being Native American.", "title": "" } ]	[ { "docid": "041c81f0aeb57d71149e2a4bbf21e5b2", "text": "Find out whether your state has a homestead law or something similar, which might protect your primary residence during bankruptcy. You may have to explicitly register to receive that protection; details differ. Frankly, you'll get better answers to this sort of question from an agency in your area which deals with folks at risk of of bankruptcy/foreclosure/etc. They should know all the tricks which actually work in your area. Hiring a lawyer may also be advisable/necessary", "title": "" }, { "docid": "1c6f4d4d60e2d0ab33a4dc222df18be3", "text": "It sort of sounds like you want to contradictory things: (1) to fix your credit so you will be able to get loans and (2) to have more money available to spend now. It sounds like the latter is probably not possible. Not without getting into a worse situation than you are currently in (based on what you have written the next step is payday loans and the like, which is basically financial suicide). Fixing your credit is simple. It's just not fun. Cut your spending. Cut it way, way, way down. You will certainly have to change your lifestyle. I'd suggest taking a second job. Make the minimum payment on everything, then put all your extra money toward the most pressing things: I would focus on the former. As you pay down your debt your utilization will go down, and this will raise your score automatically. When you pay off your highest interest rate debt, don't change your spending. Instead put everything you were putting to that to the next highest debt you have. Continue until your highest interest rate loan is at or below the mortgage rate. When you get to this point you will notice that your credit score is vastly better and you are no longer spending all your money on interest. You will probably be in a position to buy a home. And you will have the satisfaction of knowing you did it yourself, rather than having a bankruptcy judge force you to change your lifestyle. A note on the items in collections: make sure they are all legit. If any are wrong, it is pretty straightforward to contest them with the credit bureaus and get them taken off. Things in collections will drop your score severely.", "title": "" }, { "docid": "1c0b26d263cfa5db63d98c2b6fdab3c0", "text": "Depending on the state this might not be possible. Loans are considered contracts, and various states regulate how minors may enter into them. For example, in the state of Oregon, a minor may NOT enter into a contract without their parent being on the contract as well. So you are forced to wait until you turn 18. At that time you won't have a credit history, and to lenders that often is worse than having bad credit. I can't help with the car (other than to recommend you buy a junker for $500-$1,000 and just live with it for now), but you could certainly get a secured credit card or line of credit from your local bank. The way they are arranged is, you make a deposit of an amount of your choosing (generally at least $200 for credit cards, and $1,000 for lines of credit), and receive a revolving line with a limit of that same amount. As you use and pay on this loan, it will be reported in your credit history. If you start that now, by the time you turn 18 you will have much better options for purchasing vehicles.", "title": "" }, { "docid": "c5d895efa21e2ef274c014d4641e24f5", "text": "I'd suggest you start with a budget that includes savings, the minimum payment for those loans, estimates for recurring expenses, entertainment, and lifestyle items. That will let you baseline how much money you need for the lifestyle you want to have. Then apply your income to that model and whatever is left distribute out to your loans starting with the highest risk (not forgivable in bankruptcy/would make you homeless if you don't pay) and highest interest rate.", "title": "" }, { "docid": "4ebdef47b59f8a0bdd4e4fba0440b5b3", "text": "This is fraud and could lead to jail time. The vast majority of people cannot obtain such loans without collateral and one would have to have a healthy income and good credit to obtain that kind of loan to purchase something secured by a valuable asset, such as a home. Has this been done before? Yes, despite it being the US, you may find this article interesting. Hopefully, you see how the intent of this hypothetical situation is stealing.", "title": "" }, { "docid": "8984b0ed735ffb117955ffa87b4c4e62", "text": "Why not just do an FHA loan? The minimum credit score is 580, and you can sometimes even go lower than that. Another alternative is to consider a rent-to-own agreement with his landlord, since it sounds like if he doesn't buy he'd continue renting there anyway.", "title": "" }, { "docid": "07e123a177d889032a39a30591804b35", "text": "These are your options: Unfortunately this will not be a quick process. You should note that until a potential lender goes through a detailed review of your finances you have only been pre-qualified. This is not as good as pre-approved. With pre-qualified they are basing the determination on what you told them, not what you can prove. Because you are aware of your short period of continuous employment you are best to be completely honest with a potential lender. That way you don't run into problems 30 days down the road when they realize the issue. The home seller will not be happy; and there was time and money wasted on down payments, credit checks, home inspections, and appraisals. In the US in most markets while there is a significant risk that a particular house will not be available in 5 months, there is a very slight risk that a neighborhood will not be available in 5 months.", "title": "" }, { "docid": "01660d563246a14fbfa3a43f9d4ef01b", "text": "\"If you owe the money to A, and B owes you money and goes bankrupt, that has no effect whatsoever on your loan from A. Obviously. Your best bet -- while you still owe and are owed by the same company -- is either get them to agree to apply your credit to your debt (reducing it to $30,000) -- or rush to the courthouse and ask a judge to order this done. You want to do this well before the bankruptcy is filed; too close and someone could object to you having been paid preferentially or \"\"out of turn\"\" -- and claw back the money, meaning you now owe it to the bankruptcy trustee. Your debt to them is, from their perspective, an asset. It is an asset with a cash value (based on the probability of people in that portfolio paying). It can be sold to gain some immediate cash instead of more cash over a time period. This is routine in the debt world. Before or during the throes of bankruptcy, and depending on what the reorganization plan is, the bank is quite likely to sell your debt to someone else to raise cash - typically a distress sale for a fraction of its principal value (e.g. 20% or $10,000). That goes into the pool of money to pay creditors such as yourself, and if you're lucky, you'll get some of it. So good on you, you got $2000 back from the bank and now you owe someone else $50,000. I'm assuming they owe you $20,000 for IT services or because you put a new roof on their branch, or something like that. If it's money on deposit at the bank, then two things are true: First, pre-bankruptcy, you can trivially command the bank to dump the entire $20,000 into paying down the debt. Instantly: done, and irreversible. The bankruptcy trustee can't claw that back because it was never the bank's money, it was yours. Second, any civilized country has deposit insurance, which they typically implement by helping another bank buy out your bank, and continue to honor your deposits, so this is seamless and hands-off for you. Your old checks continue to work, your branch just changes their sign. This deposit insurance has limits, which is only a problem for the very rich (who are dumb enough to put over the limit in one bank).\"", "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": "56118b160c84e11733b13d8d909fbd1d", "text": "I think the cleanest way to do this is to rent the house from your father for 2 years, possibly adding an option to buy at a set price to the lease agreement. That takes care of any gift issues, and avoids complications like you living in a house that you couldn't afford to own otherwise. If/when you are able to afford a mortgage, get a mortgage on the house and buy it from your father. Will a bank be willing to take out a mortgage on a house that I technically own for the full amount? I would not take out a mortgage for anything more than 80% of the house's market value. Anything more than that, and you need to pay mortgage insurance, which will increase your monthly payment for no benefit to you. My biggest concern is that you won't be able to afford an 80% mortgage after 2 years. If your father really wants to keep the house in the family then he should either keep the house and rent it to you, or give you the down payment as a gift (keeping under the maximum gift to avoid taxes). If neither you or your father cannot afford the house you may have no choice but to sell it. I would not advise you make a bad financial decision purely for sentimental reasons.", "title": "" }, { "docid": "b1fbd376f5460b97bd2655cca07af266", "text": "It sounds like you may need to look into the different types of personal loans that are available to you. Typically, they are in 2 categories: secured vs unsecured. A personal loan is usually of the unsecured variety, meaning that the bank is loaning you money with no collateral to use if you default. These loans will have much higher interest rates than a secured loan. A prime example of a secured loan would be a mortgage or an equity line of credit. If you want an unsecured personal loan to use towards making those improvements, then whether or not you receive the loan will depend on your credit rating and income status. As Aganju stated, these loans don't really care what the money is used for. Because it's not your property that you're fixing up, you won't be able to get a secured loan against that property. If your mother took out a loan against her home (like a second mortgage), she may be able to get a significantly lower interest rate than what you'll get with an unsecured loan. She could also look into a renovation/remodeling loan, which would require information regarding the work being done such as costs and how it will improve the value of the property. If she used an equity line of credit instead, then they don't typically care what the money will be used for as it's just a credit line against the equity she's already built into her mortgage payments over the years.", "title": "" }, { "docid": "294582409e8519b9c4ad6efb4b57e999", "text": "\"There are two options (according to Wells Fargo). You can either apply for a Business/Commercial Equity Loan or a Line of Credit. A loan is what it sounds like - they give you a lump sum of money for you to use and you have to pay it in monthly installments. A line of credit is like a credit card, you have money that you can borrow (up to a certain amount) and you have to make monthly payments. The process can differ for different business, they probably look at what your real estate is worth, how much money you are generating from it, etc. I am not recommending or endorsing Wells Fargo, other major banks offer the same types of products, Wells Fargo just happened to appear first when I searched for \"\"business line of credit\"\".\"", "title": "" }, { "docid": "8a5bb0e9b47404b931db4000eeea9f93", "text": "It's sad. My mother lost her job after a brutal divorce. BOA bought up Countrywide, then when my mother pleaded for assistance BOA said they could not help her unless she was behind/in default of her mortgage. She tried to do a deed-in-lieu with a lawyer and BOA refused to accept the deed-in-lieu many times. Then BOA sold her mortgage to Green Tree (?) and they refused her deed-in-lieu as well. This went on for over 2 years and they foreclosed on the house. I told my mother to sue because they should have accepted her deed-in-lieu because it was approved by the court in her bankruptcy but she was tired of trying to save her house that she just walked away. 6 months after she left and moved in with my sister Green Tree called her offering a refinance at a lower rate and a mortgage payment that was less than a typical car payment. Now 5 years later my mom is just going to pay cash for her house and never do a mortgage again.", "title": "" }, { "docid": "db55fcd2f97c74a6efdd5ddbac173c5b", "text": "It sounds like there are no provisions in the loan document for how to proceed in this case. I would view this as creating a brand new loan. The amount owed is going to be (Principal remaining + interest from 2 years + penalties). If you created a new loan for 13 years, that would not be how I would expect a lender to behave. I would expect most repayment plans to be something like make double payments until you are caught up or pay an extra $1000 per month until caught up and then resume normal payments.", "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": "" } ]	fiqa
586f58968a01c28eabd9b7e958b99b18	Accounting for currency depreciation	[ { "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": "3afb0883ae38ba9c71dcea12eef9398c", "text": "I have been following some of these threads. Some of them are really old. I have read used recording to equity accounts to resolve the imbalance USD issue. The thing I noticed is that all my imbalances occur when paying bills. I took all the bills and set them up as vendor accounts, entered the bills in the new bills, and used the process payment when paying bills. The imbalance issue stopped. It makes sense. The system is a double entry. That's it will credit and debit. Assets accounts are increased with a debit and decreased with a credit. Equity accounts are increased with a credit and decreased with a debit. ie; Say you have an monthly insurance bill for $100. You enter it into the new vendor bill. This credits Accounts Payable. When paying the bill it credits checking, debits account payable, credits vendor account, debits the expense insurance. In short for each credit there has to be a debit for the books to balance. When there is no account for it to record to it will record in Imbalance USD to balance the books.", "title": "" }, { "docid": "2a0cdfb465cc280f9d44a1a6d815150e", "text": "Straight line depreciation is marginal as far as I understand. It would be a flat expense each year. Unless you mean 2 mil year one and 4 mil for years one and two combined and it's just written ambiguously here. It seems pretty straight-forward to me. 10 mil rev per year operating increase. 6.5 mil operation expense increase. Net income= rev-expenses. Depreciation expense is not an operating expense. As far as relevant cash flows I guess if there's not omitted info in this post would just be the cash for the initial investment, the added expenses, the added revenue, the salvage sale.", "title": "" }, { "docid": "c7eaa130ef48b436d0261060eaf23c20", "text": "If you're audited routinely you probably have an accountant to get this straight. It's not something that I would be too worried about as it is purely journal-entry issue, there's no problem with the actual money. Mistakes happen. I'd suggest converting the currency, taking loss/gain on the conversion as a capital loss/gain, and credit the correct currency to the correct account. If GnuCash causes problems - just record it in the EUR equivalent, putting in notes the actual SGD value. Note that I'm not an accountant and this is not a professional advice.", "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": "eafe19575c9337cfa63e45572f1e32ba", "text": "Huh. It appears it's only currencies in sterling that are fully exempt. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg12602 Government manuals are more detailed than .gov but still not perfect as it's HMRCs interpretation of legislation and has been overturned in the past. There is also another (old) article here about foreign currency transactions. https://www.taxation.co.uk/articles/2010/10/27/21191/currency-gains I have never come across forex capital gains in practice but I've learnt something today! Something to look out for in the UK as well I guess.", "title": "" }, { "docid": "00d49f052fb781ee71a1495d8231ff6e", "text": "It depends on the asset and the magnitude of the exchange rate change relative to the inflation rate. If it is a production asset, the prices can be expected to change relative to the changes in exchange rate regardless of magnitude, ceteris paribus. If it is a consumption asset, the prices of those assets will change with the net of the exchange rate change and inflation rate, but it can be a slow process since all of the possessions of the country becoming relatively poorer cannot immediately be shipped out and the need to exchange wants for goods will be resisted as long as possible.", "title": "" }, { "docid": "e61919cc2567f96df4868a9c4de17281", "text": "At any instant, three currencies will have exchange rates so if I know the rate between A and B, and B to C, the A to C rate is easily calculated. You need X pounds, so at that moment, you are subject to the exchange rate right then. It's not a deal or bargain, although it may look better in hindsight if the currencies move after some time has passed. But if a currency is going to depreciate, and you have the foresight to know such things, you'd already be wealthy and not visiting here.", "title": "" }, { "docid": "ccef86861b5918e8ad02925f6b4ea9c4", "text": "Is there not some central service that tracks current currency rates that banks can use to get currency data? Sure. But this doesn't matter. All the central service can tell you is how much the rate was historically. But the banks/PayPal don't care about the historical value. They want to know the price that they'll pay when they get around to switching, not the last price before the switch. Beyond that, there is a transaction cost to switching. They have to pay the clearinghouse for managing the transaction. The banks can choose to act as a clearinghouse, but that increases their risk. If the bank has a large balance of US dollars but dollars are falling, then they end up eating that cost. They'll only take that risk if they think that they'll make more money that way. And in the end, they may have to go on the currency market anyway. If a European bank runs out of US dollars, they have to buy them on the open market. Or a US bank might run out of Euros. Or Yen. Etc. Another problem is that many of the currency transactions are small, but the overhead is fixed. If the bank has to pay $5 for every currency transaction, they won't even break even charging 3% on a $100 transaction. So they delay the actual transaction so that they can make more than one at a time. But then they have the risk that the currency value might change in the meantime. If they credit you with $97 in your account ($100 minus the 3% fee) but the price actually drops from $100 to $99, they're out the $1. They could do it the other way as well. You ask for a $100 transaction. They perform a $1000 transaction, of which they give you $97. Now they have $898 ($1000 minus the $5 they paid for the transaction plus the $3 they charged you for the transaction). If there's a 1% drop, they're out $10.98 ($8.98 in currency loss plus a net $2 in fees). This is why banks have money market accounts. So they have someone to manage these problems working twenty-four hours a day. But then they have to pay interest on those accounts, further eating into their profits. Along with paying a staff to monitor the currency markets and things that may affect them.", "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": "" }, { "docid": "3200217e7939b7c9eb0a82e4a1124feb", "text": "Here is the technical guidance from the accounting standard FRS 23 (IAS 21) 'The Effects of Changes in Foreign Exchange Rates' which states: Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognised in profit or loss in the period in which they arise. An example: You agree to sell a product for $100 to a customer at a certain date. You would record the sale of this product on that date at $100, converted at the current FX rate (lets say £1:$1 for ease) in your profit loss account as £100. The customer then pays you several $100 days later, at which point the FX rate has fallen to £0.5:$1 and you only receive £50. You would then have a realised loss of £50 due to exchange differences, and this is charged to your profit and loss account as a cost. Due to double entry bookkeeping the profit/loss on the FX difference is needed to balance the journals of the transaction. I think there is a little confusion as to what constitutes a (realised) profit/loss on exchange difference. In the example in your question, you are not making any loss when you convert the bitcoins to dollars, as there is no difference in the exchange rate between the point you convert them. Therefore you have not made either a profit or a loss. In terms of how this effects your tax position; you only pay tax on your profit and loss account. The example I give above is an instance where an exchange difference is recorded to the P&L. In your example, the value of your cash held is reflected in your balance sheet, as an asset, whatever its value is at the balance sheet date. Unfortunately, the value of the asset can rise/fall, but the only time where you will record a profit/loss on this (and therefore have an impact on tax) is if you sell the asset.", "title": "" }, { "docid": "e3ddaf7271004c475e64b50bd5c65277", "text": "\"This formula is not calculating \"\"Earnings\"\". Instead, it is calculating \"\"Free Cash Flow from Operations\"\". As the original poster notes, the \"\"Earnings\"\" calculation subtracted out depreciation and amortization. The \"\"Free Cash Flow from Operations\"\" adds these values back, but for two different reasons:\"", "title": "" }, { "docid": "3048fcd106371966f419a784a95ddf8e", "text": "The closest thing that you are looking for would be FOREX exchanges. Currency value is affected by the relative growth of economies among other things, and the arbritrage of currencies would enable you to speculate on the relative growth of an individual economy.", "title": "" }, { "docid": "1a5261fd35e60a67b52827496240db6b", "text": "\"Like Jeremy T said above, silver is a value store and is to be used as a hedge against sovereign currency revaluations. Since every single currency in the world right now is a free-floating fiat currency, you need silver (or some other firm, easily store-able, protect-able, transportable asset class; e.g. gold, platinum, ... whatever...) in order to protect yourself against government currency devaluations, since the metal will hold its value regardless of the valuation of the currency which you are denominating it in (Euro, in your case). Since the ECB has been hesitant to \"\"print\"\" large amounts of currency (which causes other problems unrelated to precious metals), the necessity of hedging against a plummeting currency exchange rate is less important and should accordingly take a lower percentage in your diversification strategy. However, if you were in.. say... Argentina, for example, you would want to have a much larger percentage of your assets in precious metals. The EU has a lot of issues, and depreciation of hard assets courtesy of a lack of fluid currency/capital (and overspending on a lot of EU governments' parts in the past), in my opinion, lessens the preservative value of holding precious metals. You want to diversify more heavily into precious metals just prior to government sovereign currency devaluations, whether by \"\"printing\"\" (by the ECB in your case) or by hot capital flows into/out of your country. Since Eurozone is not an emerging market, and the current trend seems to be capital flowing back into the developed economies, I think that diversifying away from silver (at least in overall % of your portfolio) is the order of the day. That said, do I have silver/gold in my retirement portfolio? Absolutely. Is it a huge percentage of my portfolio? Not right now. However, if the U.S. government fails to resolve the next budget crisis and forces the Federal Reserve to \"\"print\"\" money to creatively fund their expenses, then I will be trading out of soft assets classes and into precious metals in order to preserve the \"\"real value\"\" of my portfolio in the face of a depreciating USD. As for what to diversify into? Like the folks above say: ETFs(NOT precious metal ETFs and read all of the fine print, since a number of ETFs cheat), Indexes, Dividend-paying stocks (a favorite of mine, assuming they maintain the dividend), or bonds (after they raise the interest rates). Once you have your diversification percentages decided, then you just adjust that based on macro-economic trends, in order to avoid pitfalls. If you want to know more, look through: http://www.mauldineconomics.com/ < Austrian-type economist/investor http://pragcap.com/ < Neo-Keynsian economist/investor with huge focus on fiat currency effects\"", "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": "dfc83f88b6585b59ac0a6f5dd80350e4", "text": "\"No money is gone. The movement of the existing currency has slowed down. Currency moves through the economy through deposits or loans to banks, and withdrawal from banks as proceeds from loans or return of deposits. When a bank makes a loan they provide a balance in a bank account, which isn't converted to hard currency until withdrawn. So those bank loans essentially count as currency, and thus effectively multiply the stock of currency available. Deposits into money market funds, and those funds loans into the commercial paper markets, have the same effect. Banks and money funds are now making fewer loans. In particular they are not funding \"\"companies\"\" that invested in securitizations of home mortgages and credit card receivables, but they are also lending less to businesses and consumers. Because they are lending less they are \"\"effectively multiplying\"\" the currency less. Think of deposited and lent currency as spare cycles on a desktop computer. You let your computer help decipher the genome when you aren't using it yourself. If you somehow feared that you would lose those cycles, slowing down your own computing, you would be less likely to lend those cycles out. There would still be the same number of computing cycles in the world, but the stock of those available for actual computing would appear to be diminished. The technical term for this concept is \"\"monetary velocity\"\" and it is a crucial factor in determing the level of overall economic activity, banking stability, and inflation.\"", "title": "" } ]	fiqa
45faf2b6aec69c3044500d6287a385e6	What are my tax-advantaged investment options at a university job?	[ { "docid": "b77580927c6b5fde3244c1993d21e4a8", "text": "\"Yes. Two years after your first contribution to the SIMPLE IRA, you can roll it to a traditional IRA. You can still contribute \"\"pre-tax\"\", but the mechanism will be slightly different, since with an employer plan the contribution was automatically deducted from your paycheck. With an individual plan, you make the contributions yourself and then get a tax deduction when you file. Since contributions to traditional and Roth IRAs combined are capped at $5,500 if you're under 50, some sort of employer-sponsored plan might be better from a contribution standpoint. If your institution offers some sort of plan other than a 401(k), you might still want to roll to a traditional IRA, since you will have much more flexibility in the investments you choose. On the flip side, if that thought is overwhelming, having a smaller set of options might be better for your peace of mind.\"", "title": "" } ]	[ { "docid": "a65594a18d3dd998b566955e0836c790", "text": "If you're sure you want to go the high risk route: You could consider hot stocks or even bonds for companies/countries with lower credit ratings and higher risk. I think an underrated cost of investing is the tax penalties that you pay when you win if you aren't using a tax advantaged account. For your speculating account, you might want to open a self-directed IRA so that you can get access to more of the high risk options that you crave without the tax liability if any of those have a big payout. You want your high-growth money to be in a Roth, because it would be a shame to strike it rich while you're young and then have to pay taxes on it when you're older. If you choose not to make these investments in a tax-advantaged account, try to hold your stocks for a year so you only get taxed at capital gains rates instead of as ordinary income. If you choose to work for a startup, buy your stock options as they vest so that if the company goes public or sells privately, you will have owned those stocks long enough to qualify for capital gains. If you want my actual advice about what I think you should do: I would increase your 401k percentage to at least 10% with or without a match, and keep that in low cost index funds while you're young, but moving some of those investments over to bonds as you get closer to retirement and your risk tolerance declines. Assuming you're not in the 25% tax bracket, all of your money should be in a Roth 401k or IRA because you can withdraw it without being taxed when you retire. The more money you put into those accounts now while you are young, the more time it all has to grow. The real risk of chasing the high-risk returns is that when you bet wrong it will set you back far enough that you will lose the advantage that comes from investing the money while you're young. You're going to have up and down years with your self-selected investments, why not just keep plugging money into the S&P which has its ups and downs, but has always trended up over time?", "title": "" }, { "docid": "8439491878fa8722c81dcce170268652", "text": "Your approach sounds solid to me. Alternatively, if (as appears to be the case) then you might want to consider devoting your tax-advantaged accounts to tax-inefficient investments, such as REITs and high-yield bond funds. That way your investments that generate non-capital-gain (i.e. tax-expensive) income are safe from the IRS until retirement (or forever). And your investments that generate only capital gains income are safe until you sell them (and then they're tax-cheap anyway). Of course, since there aren't really that many tax-expensive investment vehicles (especially not for a young person), you may still have room in your retirement accounts after allocating all the money you feel comfortable putting into REITs and junk bonds. In that case, the article I linked above ranks investment types by tax-efficiency so you can figure out the next best thing to put into your IRA, then the next, etc.", "title": "" }, { "docid": "1edca5b9b17bb709dc2829c540f211a5", "text": "\"Those advantages you've described (tax treatment and employee match) are what you receive in exchange for \"\"locking up\"\" the money. Ultimately it's a personal choice of whether that tradeoff makes sense for you situation (I'll echo the response that the real answer to your question is planning). Roth options (either 401K or IRA) may be good compromises for you, since you can withdraw those contributions (but not the earnings) without any penalty, since you've already paid taxes on them. Another avenue to explore may be a self-directed IRA or a Solo 401(k), depending on your circumstances and eligibility. In both cases, there are plan providers that structure the plan to allow you to use the money to invest in things besides traditional stocks, bonds, and mutual funds (often referred to as \"\"checkbook control\"\" accounts). They are very commonly used among Real Estate investors (this thread from BiggerPockets has quite a bit of info). You'd want to consult with an accountant or financial adviser before going down that path.\"", "title": "" }, { "docid": "29f435b2c18dc8dbc198bb80a1cabc83", "text": "If treaties are involved for something other than exempting student wages on campus, you shouldn't do it yourself but talk to a licensed US tax adviser (EA/CPA licensed in your state) who's well-versed in the specific treaty. Double taxation provisions generally mean that you can credit the foreign tax paid to your US tax liability, but in the US you can do that regardless of treaties (some countries don't allow that). Also, if you're a US tax resident (or even worse - a US citizen), the royalties related treaty provision might not even apply to you at all (see the savings clause). FICA taxes are generally not part of the income tax treaties but totalization agreements (social security-related taxes, not income taxes). Most countries who have income tax treaties with the US - don't have social security totalization agreements. Bottom line - talk to a licensed professional.", "title": "" }, { "docid": "d6c3643ca3542cc5de3c2eccae8c6fa4", "text": "I would not advise this for two reasons: Your point that the investment could be lower at the end of the 3 years is a concern, although with a safe investment, it is less so, but this reduces the potential gain. While your interest is not gaining interest, your interest charged is based on the principal. If you pay off the loans, you reduce the principal and therefore you pay less interest in the long run, even if the interest isn't capitalized. All that this means is that you are basically being charged simple interest as opposed to compounding interest, but reducing the principal helps in either case. You are mistaken about the benefits of the tax deduction. You reduce your tax bill by the marginal rate times the student loan interest you paid for the year. So if you are in the 15% tax bracket and paid $100 in interest, you save $15. This is not a reason to keep the loans (because you have to pay $100 to get $15), but you are mistaken on the benefit, it has nothing to do with shifting the tax brackets. Also, speaking of taxes, don't forget that you pay taxes on investment gains.", "title": "" }, { "docid": "eb0aaf07385a614da2199677cdbf2c77", "text": "Look into the Coverdell Education Savings Account (ESA). This is like a Roth IRA for higher education expenses. Withdrawals are tax free when used for qualified expenses. Contributions are capped at $2000/year per beneficiary (not per account) so it works well for young kids, and not so well for kids about to go to College. This program (like all tax law) are prone to changes due to action (or inaction) in the US Congress. Currently, some of the benefits are set to sunset in 2010 though they are expected to be renewed in some form by Congress this year.", "title": "" }, { "docid": "9a9d932f7e317e965f944a41ec48a41d", "text": "I can make that election to pay taxes now (even though they aren't vested) based on the dollar value at the time they are granted? That is correct. You must file the election with the IRS within 30 days after the grant (and then attach a copy to that year's tax return). would I not pay any taxes on the gains because I already claimed them as income? No, you claim income based on the grant value, the gains after that are your taxable capital gains. The difference is that if you don't use 83(b) election - that would not be capital gains, but rather ordinary salary income. what happens if I quit / get terminated after paying taxes on un-vested shares? Do I lose those taxes, or do I get it back in a refund next year? Or would it be a deduction next year? You lose these taxes. That's the risk you're taking. Generally 83(b) election is not very useful for RSUs of established public companies. You take a large risk of forfeited taxes to save the difference between capital gains and ordinary gains, which is not all that much. It is very useful when you're in a startup with valuations growing rapidly but stocks not yet publicly trading, which means that if you pay tax on vest you'll pay much more and won't have stocks to sell to cover for that, while the amounts you put at risk are relatively small.", "title": "" }, { "docid": "84411a050a4a0f71b511778dfd57d32c", "text": "\"First, bear in mind that you're talking about having an average of ~£2000 saved up at any given time (if you spend all your stipend every quarter at a steady rate you'll start out with all of it and have none left at the end of the quarter), along with any long-term savings you manage to build up over time. In today's low-interest rate environment of ~1% interest rates, we're talking about approximately £20/year interest. So it's not worth a huge amount of effort to optimise this. You mentioned a \"\"bonus\"\", but looking at the Charter Savings website I don't actually see one listed for either the Cash ISA or the savings accounts you mention. In general, banks in the UK actually use bonus rates as a short-term measure to suck in new customers, and the bonuses typically expire after a while leaving you with a worse rate. Also, I don't think either of the rates you mention is guaranteed - they are both listed as \"\"variable\"\". In reality, I doubt they will go down too much more, given that the likely next move in UK interest rates is upwards. The typical main advantage of an ISA is its tax free nature. But from your question I assume you don't have any other income, so you won't need to pay tax on any interest you earn outside an ISA either. Also, given that your budget is quite tight and you expect to spend most or all of your stipend, there's no advantage to using an account where you can build up long-term tax-free savings. Even if you do have a few thousand pounds left over by the end of your PhD, you'll easily be able to put those into an ISA at that point given the annual limit of £20K. You're right not to want to take any risks with the money, and there aren't really any risk-free investments other than savings accounts available, at least on the timescales you're talking about. So overall I'd just go for the 1.26% return. Edit: as @marktristan's answer points out, you will probably be able to find a \"\"loss leader\"\" current account that actually offers more interest than a savings account. You'll need to either use a single current account and manage your budgeting carefully, or use a second current account as your \"\"savings\"\" account and make sure to set things up to satisfy the requirements of the account you choose, such as incoming payments or outgoing direct debits.\"", "title": "" }, { "docid": "eabd723d57d919a323d3f41519a30077", "text": "If it were my money, I wouldn't put it in a 401(k) for this purpose. If you were working at a company that provided 401(k) matching, then it might be worth it to put the money in your employer's 401(k) because the employer chips in based on what you put in. But you're self-employed, so there's no matching unless you match it yourself. (Correct?) So, given that there's no matching, a 401(k) arrangement would have more restrictions than a non-tax-advantaged account (like a bank account, or a taxable money market account). This would be taxable in the year you earn the money, but then that's it. If you're expecting to pull out the money pre-retirement, I wouldn't put it in in the first place.", "title": "" }, { "docid": "af4dbc0ed1f473214c1b014c4152a01e", "text": "Question One: Question Two: Your best reference for this would be a brokerage account with data privileges in the markets you wish to trade. Failing that, I would reference the Chicago Mercantile Exchange Group (CME Group) website. Question Three: Considering future tuition costs and being Canadian, you are eligible to open a Registered Education Savings Plan (RESP). While contributions to this plan are not tax deductible, any taxes on income earned through investments within the fund are deferred until the beneficiary withdraws the funds. Since the beneficiary will likely be in a lower tax bracket at such a time, the sum will likely be taxed at a lower rate, assuming that the beneficiary enrolls in a qualifying post secondary institution. The Canadian government also offers the Canada Education Savings Grant (CESG) in which the federal government will match 20% of the first $2500 of your annual RESP contribution up to a maximum of $500.", "title": "" }, { "docid": "6851122f48b8fd967b1633e2c0bdc341", "text": "Do you get cash (or a deposit into your bank account) of your PhD stipend and then you immediately send the university a check to pay the tuition fee (which might be more than the cash you get from the University)? Or does the University simply keep the stipend money, transferring it from one pocket to another in essence, and say, OK, you have paid your tuition except for $X that you still owe us? Or does the university grant you a tuition waiver as part of your assistantship and reports this as income on Form 1099-MISC? In all of these cases, the money reported on Form 1099-MISC is not taxable income to you, and it is neither subject to Self-Employment tax (basically, Social Security and Medicare tax -- both the employee's share and the employer's share) nor to (Federal) income tax.", "title": "" }, { "docid": "e6a05a201fa315f59ff8f24e7e0a57ce", "text": "One of many things to consider is that in the United States student loan interest is tax deductible. That fact could change the math enough to make it worth putting A's money elsewhere depending on his interest rate and income bracket.", "title": "" }, { "docid": "56596fac5107f6f0af730a04194202f2", "text": "\"A little terminology: Grant: you get a \"\"gift\"\" with strings attached. \"\"Grant\"\" refers to the plan (legal contract) under which you get the stock options. Vesting: these are the strings attached to the grant. As long as you're employed by the company, your options will vest every quarter, proportionally. You'll become an owner of 4687 or 4688 options every quarter. Each such vest event means you'd be getting an opportunity to buy the corresponding amount of stocks at the strike price (and not the current market price which may be higher). Buying is called exercising. Exercising a nonqualified option is a taxable event, and you'll be taxed on the value of the \"\"gift\"\" you got. The value is determined by the difference between the strike price (the price at which you have the option to buy the stock) and the actual fair market value of the stock at the time of vest (based on valuations). Options that are vested are yours (depending on the grant contract, read it carefully, leaving the company may lead to forfeiture). Options that are not vested will disappear once you leave the company. Exercised options become stocks, and are yours. Qualified vs Nonqualifed - refers to the tax treatment. Nonqualified options don't have any special treatment, qualified do. 3.02M stocks issued refers to the value of the options. Consider the total valuation of the company being $302M. With $302M value and 3.02M stocks issued, each stock is worth ~$100. Now, in a year, a new investor comes in, and another 3.02M stocks are issued (if, for example, the new investor wants a 50% stake). In this case, there will be 6.04M stocks issued, for 302M value - each stock is worth $50 now. That is called dilution. Your grant is in nominal options, so in case of dilution, the value of your options will go down. Additional points: If the company is not yet public, selling the stocks may be difficult, and you may own pieces of paper that no-one else wants to buy. You will still pay taxes based on the valuations and you may end up paying for these pieces of paper out of your own pocket. In California, it is illegal to not pay salary to regular employees. Unless you're a senior executive of the company (which I doubt), you should be paid at least $9/hour per the CA minimum wages law.\"", "title": "" }, { "docid": "82a1de33a2e64a523ba56e8e1b2a00b7", "text": "It is absolutely legal. While studying on a F-1 you would typically be considered a non-resident alien for tax purposes. You can trade stocks, just like any other foreigner having an account with a US- or non-US based brokerage firm. Make sure to account for profit made on dividends/capital gain when doing your US taxes. A software package provided by your university for doing taxes might not be adequate for this.", "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": "" } ]	fiqa
cc0336d12b206033a4c0fceb595ae0e8	Separating money in bank account without opening another account	[ { "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": "e2556cddd3a3db377c1f4eef65198dbc", "text": "\"The official guide can be found here, but that can be a little in depth as well. To make good use of you need at least a little knowledge of double-entry bookkeeping. Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account. From Wikipedia Another way to think of it is that everything is an account. You'll need to set up accounts for lots of things that aren't accounts at your bank to make the double-entry system work. For example you'll need to set up various expense accounts like \"\"office supplies\"\" even though you'll never have a bank account by that name. Generally an imbalanced transfer is when you have a from or to account specified, but not both. If I have imbalanced transactions I usually work them from the imbalance \"\"account\"\", and work each transaction to have its appropriate tying account, at which point it will no longer be listed under imbalance.\"", "title": "" }, { "docid": "32062a8ccc2d04e06e6d0bc000eab399", "text": "If your old bank has online billpay, you might be able to either use that to send a check to yourself, or do an ACH transfer directly into your new account.", "title": "" }, { "docid": "b2c42bddf3080ea7ae21817338063ec0", "text": "The bank won't let you because: Differences in required account features — Business accounts have different features (many of them legal features) that are required by businesses. For instances: Do you want to be able to deposit cheques that are written out to your business name? You need a business account for that. Your business could be sold. Then it wouldn't be your business, so it wouldn't make sense to put the business account under your personal name. The bank account and the cash it holds is a business asset and should be owned by the business, so when the business is sold the account goes with it. This is especially the case for a corporation that has shareholders, and not a sole proprietorship. For a business, you could also, in theory, assign other people as signing authorities on the business account (e.g. your corporate treasurer), and the individuals performing that role could change over time. Business accounts allow for this kind of use. Market segmentation — The bank has consciously undertaken to segment their product offerings in order to maximize their profit. Market segmentation helps the bottom line. Even if there were zero legal reasons to have separate personal vs. business accounts, banks would still make it their policy to sell different account types according to use because they can make more money that way. Consider an example in another industry: The plain-old telephone company also practices segmentation w.r.t. personal/business. Do you want a telephone line for a business and listed as such in the phone book? You need a business line. Do you want a phone line hooked up at a non-residential address? You need a business line. Here it's clear it is less of a legal issue than with the bank account, and it doesn't matter that the technical features of the phone line may be identical for the basic product offerings within each segment. The phone company has chosen to segment and price their product offerings this way. Q. Why do companies choose to charge some kinds of customers more than others for essentially the same underlying service? A. Because they can.", "title": "" }, { "docid": "9d9b8106c6faa5826c974441dda0bf78", "text": "Almost any financial institution has the technical ability to do this (simply called sweeps, auto sweeps, or deposit sweeps); the issue you face is finding an institution that is willing to do it for you. I think you will have the most luck at your primary financial institution where you currently keep the majority of your banking relationship. You will have better luck at small-town banks and credit unions. The mega banks will likely not waver from their established policies. Deposit sweeps are common for business accounts. They are usually tied to a savings account, which is usually held within the same institution, however this is not a requirement. The sweep can send money to any US bank if you can provide the routing number and account number. The sweep will establish a peg balance, or floor balance, on the checking account. At the end of the day, any amount above the peg is swept into the savings account automatically. I doubt you will find what you’re asking for within an online banking system. You will likely have to go into a branch and speak with a personal banker. Explain to them you want to establish a sweep on your checking account and want to send the funds to another financial institution. You will have better luck asking for a peg of $100, or some other small amount. They may not take your request seriously if you want to completely empty the checking account to zero.", "title": "" }, { "docid": "06da1a02f4be05b0bd45a099ebcfa5e0", "text": "There is very little difference these days between account types. The fee structure and interest paid is different, but the actual mechanics, and as noted by others, the coverage by deposit insurance is identical. So look at how much money you have in the account(s) you have; are you maximizing the interest that you could be receiving, even from the small amounts that the banks will pay? If you could get more interest from the savings account, and only write one or two cheques per month, you might be better off with that account only; but given common fee structures, you likely would not want that as your primary account. Another reason for separate accounts is more psychological. You might be able to train yourself to not dip in to your savings if you don't have a chequebook.", "title": "" }, { "docid": "35a05cfc4c1ac63cbf2f0d766a3e4561", "text": "\"How can someone use the account number to withdraw money without my consent? They can use your account number to game your banks phone support and try to phish their way into your account. Banks have gotten very good at combating this, but theoretically with just the address he lives in, your name, and a bad bank phone rep, he could get into your business. The account number would just be one more piece of information to lead with. I have 1 savings and 3 checking accounts with the same bank. Would they be able to gain access to the other accounts? Dependent on how incompetent the bad bank rep I referenced above is, sure. But the odds are incredibly low, and if anything were to happen, the bank would be falling over itself to fix it and make reparations so that you don't sue for a whole crap ton more. Is there a more secure and still free option that I have overlooked? Opening up yet another checking account solely for accounts receivable and transfer to accounts payable would keep your financial records more transparent. Also, banks are doing \"\"money transfer by email\"\" now, so I don't know how great that is for business transactions, but in that instance you're just giving out an email linked to a money receiving account instead of an actual account number. Paypal is also a pretty good EFT middleman, but their business practices have become shady in the past 5 years.\"", "title": "" }, { "docid": "79bd7c4f01712b2cf475a97e1c718284", "text": "I am not a lawyer, but the big thing to consider would be how you would split the money should either of you decide you want to close the account (or, at least her/his portion of the account). I suspect you'd also need to determine how to split the capital gains/losses for tax purposes. I can't really see any benefit to a joint account, unless you needed her money to qualify for some of the lower cost funds, and even then the difference in cost would be fairly low, much lower than the cost of having to potentially hire a lawyer to sort out all the questions.", "title": "" }, { "docid": "4798cc006c3126a0594e2e93fe22ef11", "text": "Allowing others to share access to your Bank Account; i.e. giving then the login id and password has its risks;", "title": "" }, { "docid": "de65cacded988a766e4187cca6904dd6", "text": "There are two basic ways you can separate your investments from the dollar (or any other currency).", "title": "" }, { "docid": "679ced9e58378ae7fe027ef282d26078", "text": "IngDirect has this concept of sub accounts inside a main account - that might be perfect for what you are looking for. To clarify, you basically have one physical account with logical sub account groupings.", "title": "" }, { "docid": "102958f9f7eb224d49a0ecd63eb3d7da", "text": "I see three ways to do this. Note that I kept saying interest. I assumed for this answer you were only considering money being saved in a savings account. Money that is to be invested for the long term (college fund, retirement) have much different rules for contributions, use, deductibility, age rules: that they would tend not to be mixed within the same account.", "title": "" }, { "docid": "d5982a14db1374b7b7bd1a61436c9343", "text": "\"Your first and second paragraphs are two different cases. Moving money between a checking account and a savings account will credit Cash and debit Cash, making a GL transaction unnecessary, unless the amounts in the two bank accounts are tracked as two separate GL accounts. You might have account 1001 (Cash-Checking) and account 1002 (Cash-Savings). In that case, a movement of money between these two accounts should be tracked by a transaction between the GL accounts; credit checking, debit savings. It won't affect your balance sheet, but depending on your definition of liquidity of assets it might affect working capital on your statement of cash flows (if you consider the savings account \"\"illiquid\"\" then money moved to it is a decrease in working capital). Basically, what you are creating with your \"\"store credit\"\" accounts for each client is an \"\"unearned revenue\"\" account. When clients pay you cash for work you haven't done yet, or you refund money for a return as \"\"store credit\"\" instead of cash, the credit is a liability account, balancing an increase in cash, inventory, or an expense (if you're giving credit for free, perhaps due to a mistake on your part, you would debit a \"\"Store Credit Expense\"\" account). This can be split out client-by-client in the GL if you wish, avoiding the need for a holding account. The way you want to do it, you'd have a \"\"Client Holding\"\" account. It must be unique in the GL and to the client, and yes, it is a liability account. To transfer to holding, you simply debit Unearned Revenue and credit Client Holding, logging the transaction as \"\"transfer of client store credit\"\" or similar (moving liability to liability; balance sheet doesn't change). Then, as you sell goods or services to the client, you debit Accounts Receivable and credit Revenue, then to record the payment you credit AR and debit Client Holding (up to its current credit balance, after which the client pays you Cash and you debit that, or the client still owes you). To zero out a remaining balance on the Holding account, debit Client Holding and credit Unearned Revenue. I don't think the Holding account, the way you want to use it, is a good idea. If you want to track each customer's store credit balance with a GL account, then create specialized Unearned Revenue accounts for each client who gets a store credit, named for the client and containing their balance (zero or otherwise). If you don't care about it at the GL level, then pool it in one Unearned Revenue account (have one Store Credit account if you must), and track individual amounts off the books.\"", "title": "" }, { "docid": "2e9d7187a9b2c2c141ae0b571c19d9bd", "text": "You can use an intermediary online bank account. For example, ING Direct has the ability to link to other real banks. You can link to both your old and new banks. Once linked, transfer the money from old bank to ING. Then transfer from ING to new bank. There are delays, and you can't transfer directly from bank-to-bank, but this should work, and should be free. The same concept should apply for something like PayPal or another online financial service.", "title": "" }, { "docid": "b8c4ae8966c19697d96576190b6a9ba8", "text": "Do you have direct deposit of your paycheck? If so, almost every employer will allow you to split the paycheck into two accounts. You could open one account for savings, and one for spending. Put $x from each paycheck into the savings account, and the rest into the spending account. Keep the savings account totally separate, with its own ATM card. There should be no way to get money out of this account except by using the SEPARATE ATM card. Now, get a dish of water. Put the ATM card in the dish of water. Put the dish of water in the freezer. If you are ever tempted to spend your savings, you'll have to wait for the block of ice to defrost. Hopefully, while the ice is defrosting, the urge to waste money will pass :)", "title": "" }, { "docid": "8695e8030ee3269d15f22929ed6fbf9f", "text": "I know of websites that do this, but I don't know of banks that do. Is there any reason you want to do this at a bank rather than use a service? My main concern with using a bank for this would be the risk of overdraft fees", "title": "" } ]	fiqa
3211b04b8b21f6f04bb929fc6a657b7f	Source(s) for hourly euro/usd exchange rate historic data?	[ { "docid": "fe09430d51b96d6d5c254dc47da2aefd", "text": "See the FX section of the quantitative finance SE data wiki.", "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": "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": "652a441b503ccae88a469cfbf4f0a0d6", "text": "I can't think of any specifically, but if you haven't already done so it would be worthwhile reading a textbook on macro-economics to get an idea of how money supply, exchange rates, unemployment and so on are thought to relate. The other thing which might be interesting in respect of the Euro crisis would be a history of past economic unions. There have been several of these, not least the US dollar (in the 19C, I believe); the union of the English and Scottish pound (early 1600s); and the German mark. They tend to have some characteristic problems, caused partly by different parts of the union being at different stages in an economic cycle. Unfortunately I can't think of a single text which gathers this together.", "title": "" }, { "docid": "23bfc7bcf5bd8e07cbdc2c8e76c31ccb", "text": "\"You've cited nothing but your own outlandish claims. Aside from the original USAToday article, you've not provided one link to substantiate any of the many, many assertions that you have made. > none of the people doing any of these things are \"\"true economists\"\". unsubstantiated >It's a subconscious bias thing... they all inherently belive that an \"\"inflationary currency\"\" is a good & necessary thing... ergo they do not really TRY to disprove that dogmatic assumption. unsubstantiated >... and that \"\"confirmation\"\" was the entire goal of the project. unsubstantiated Not one link. End of discussion. This is a waste of my time.\"", "title": "" }, { "docid": "ccef86861b5918e8ad02925f6b4ea9c4", "text": "Is there not some central service that tracks current currency rates that banks can use to get currency data? Sure. But this doesn't matter. All the central service can tell you is how much the rate was historically. But the banks/PayPal don't care about the historical value. They want to know the price that they'll pay when they get around to switching, not the last price before the switch. Beyond that, there is a transaction cost to switching. They have to pay the clearinghouse for managing the transaction. The banks can choose to act as a clearinghouse, but that increases their risk. If the bank has a large balance of US dollars but dollars are falling, then they end up eating that cost. They'll only take that risk if they think that they'll make more money that way. And in the end, they may have to go on the currency market anyway. If a European bank runs out of US dollars, they have to buy them on the open market. Or a US bank might run out of Euros. Or Yen. Etc. Another problem is that many of the currency transactions are small, but the overhead is fixed. If the bank has to pay $5 for every currency transaction, they won't even break even charging 3% on a $100 transaction. So they delay the actual transaction so that they can make more than one at a time. But then they have the risk that the currency value might change in the meantime. If they credit you with $97 in your account ($100 minus the 3% fee) but the price actually drops from $100 to $99, they're out the $1. They could do it the other way as well. You ask for a $100 transaction. They perform a $1000 transaction, of which they give you $97. Now they have $898 ($1000 minus the $5 they paid for the transaction plus the $3 they charged you for the transaction). If there's a 1% drop, they're out $10.98 ($8.98 in currency loss plus a net $2 in fees). This is why banks have money market accounts. So they have someone to manage these problems working twenty-four hours a day. But then they have to pay interest on those accounts, further eating into their profits. Along with paying a staff to monitor the currency markets and things that may affect them.", "title": "" }, { "docid": "b1c3ef346e865a00ed0f22d1e57bf6c2", "text": "You might have better luck using Quandl as a source. They have free databases, you just need to register to access them. They also have good api's, easier to use than the yahoo api's Their WIKI database of stock prices is curated and things like this are fixed (www.quandl.com/WIKI ), but I'm not sure that covers the London stock exchange. They do, however, have other databases that cover the London stock exchange.", "title": "" }, { "docid": "3b3693eaaf4c08b45af87d0fb167ac98", "text": "\"This is the best tl;dr I could make, [original](https://www.bloomberg.com/news/articles/2017-06-21/ecb-sees-trump-administration-as-key-risk-to-global-economy) reduced by 68%. (I'm a bot) *** > The European Central Bank cited the government of U.S. President Donald Trump as a key reason why the risks to the global economy remain tilted to the downside. > &quot;Since the U.S. election, pressures for more inward-looking policies have risen,&quot; it said. > &quot;In particular, there is significant policy uncertainty surrounding the intentions of the new U.S. administration regarding fiscal and, especially, trade policies, the latter entailing potentially significant negative effects on the global economy.\"\" * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/6imebn/ecb_sees_trump_administration_as_key_risk_to/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~149467 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: policy^#1 U.S.^#2 economy^#3 global^#4 ECB^#5\"", "title": "" }, { "docid": "8bcdf4cca2c9f6777c2b69ade14f4138", "text": "Current and past FX rates are available on Visa's website. Note that it may vary by country, so use your local Visa website.", "title": "" }, { "docid": "2285e494799ac5c925329e0178beab88", "text": "I had a question about this but it apparently wasn’t formed in the right way as I got no explanations and only downvotes, so let me try again. Given the massive amount of info you gave, I tried to go through and find the data I was asking for- data behind the projections of such a loss. Perhaps since I’m not a professional economist, It was not immediately apparent to me how to find the data behind the projections. Would you mind demonstrating how any of these sources provide the data behind how such projections are made? Or do you have any other advice as to how I could find an answer?", "title": "" }, { "docid": "63351b4cb549ad41b342e0dbf094f410", "text": "The Federal Reserve Bank publishes exchange rate data in their H.10 release. It is daily, not minute by minute. The Fed says this about their data: About the Release The H.10 weekly release contains daily rates of exchange of major currencies against the U.S. dollar. The data are noon buying rates in New York for cable transfers payable in the listed currencies. The rates have been certified by the Federal Reserve Bank of New York for customs purposes as required by section 522 of the amended Tariff Act of 1930. The historical EURUSD rates for the value of 1 EURO in US$ are at: http://www.federalreserve.gov/releases/h10/hist/dat00_eu.htm If you need to know USDEUR the value of 1 US$ in EUROS use division 1.0/EURUSD.", "title": "" }, { "docid": "94d2490c97d88ed2dc63b9efb26711fb", "text": "\"You are right, if by \"\"a lot of time\"\" you mean a lot of occasions lasting a few milliseconds each. This is one of the oldest arbitrages in the book, and there's plenty of people constantly on the lookout for such situations, hence they are rare and don't last very long. Most of the time the relationship is satisfied to within the accuracy set by the bid-ask spread. What you write as an equality should actually be a set of inequalities. Continuing with your example, suppose 1 GBP ~ 2 USD, where the market price to buy GBP (the offer) is $2.01 and to sell GBP (the bid) is $1.99. Suppose further that 1 USD ~ 2 EUR, and the market price to buy USD is EUR2.01 and to sell USD is EUR1.99. Then converting your GBP to EUR in this way requires selling for USD (receive $1.99), then sell the USD for EUR (receive EUR3.9601). Going the other way, converting EUR to GBP, it will cost you EUR4.0401 to buy 1 GBP. Hence, so long as the posted prices for direct conversion are within these bounds, there is no arbitrage.\"", "title": "" }, { "docid": "73f0f5884654654b0658b3caef2f0620", "text": "You will most likely not be able to avoid some form of format conversion, regardless of which data you use since there is, afaik, no standard for this data and everyone exports it differently. One viable option would be, like you said yourself, using the free data provided by Dukascopy. Please take into consideration that those are spot currency rates and will most likely not represent the rate at which physical and business-related exchange would have happened at this time.", "title": "" }, { "docid": "914a8d1f0698c2ba87071f40992cf1cb", "text": "Well your gripe is using historic data to estimate VAR. That is separate topic. Either way however something that happens twice a century cant be considered an outlier and if you choose to use historic data then such things need to be included.", "title": "" }, { "docid": "045a95698737bb16498d42194ede6411", "text": "I am just a C student with no hope for grad school, so you are going to have to walk me through this... The ECB (until recently), Japan, and the Swiss have been running QE programs equal to that of the Fed's in 2009 for the last couple of years. That's an extraordinary amount of money being created... what's more, is that the Swiss are even buying shitloads of American equities with it. Perhaps my understanding of M2 is flawed, but how would the Swiss national bank buying $63B in equities change M2? It's not like the fed is printing the money specifically for the transaction. The amount of QE being pumped into a healthy economy over the last couple years should be concerning, if only because it's unprecedented, especially since some of it is being directly invested into equities. I don't think there is a viable argument that can truthfully say that it isn't a pretty large variable in the market today.... but I could be wrong. Also, I've read enough, and heard enough, on how the inflation rate is measured to cultivate a healthy skepticism for the entire metric. The way they choose baskets, while obviously the best possible, is not something that lends itself to precision. Please be kind to my grammar.", "title": "" }, { "docid": "32ae5183f2ffd4b2641838817e138638", "text": "\"This is the best tl;dr I could make, [original](http://www2.gsu.edu/~ecobth/HMW_PuzzlingMultJobHolding_SEJ_2017.pdf) reduced by 99%. (I'm a bot) *** > Just as the United States displays substantial differences in MJH across states and regions, Zangelidis finds large variation in MJH rates across countries in the EU, ranging from less than 1 to 9%.6 Livanos and Zangelidis document large differences in MJH rates across regions of Greece with rural areas with large primary sectors having the highest rates, likely due to low labor demand and weak primary 6 Zangelidis also finds that mean weekly hours on the second job average 12.9 hours across the continent, with little variation across countries. > A quick glance at state rates of MJH show Minnesota with among the highest MJH rates, while New York has a relatively low rate MJH rate as compared to other northern states. > Our approach is to examine the extent to which controlling for a variety of detailed worker, job, and city attributes can account for differences across labor markets in MJH. To describe the magnitude of MSA differences in MJH, we calculate the mean absolute deviation of MJH across our 259 labor markets based on estimates from increasingly dense individual worker OLS MJH equations using the 1995-2014 urban sample. * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/6l4ana/the_puzzling_pattern_of_multiple_job_holding/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~158577 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: MJH^#1 Job^#2 rate^#3 work^#4 Labor^#5\"", "title": "" } ]	fiqa
9522c6baaf907d78bdc96cf9e0b9ccde	What kinds of exchange-traded funds (ETFs) should specifically be avoided?	[ { "docid": "147924dddfdbd367a72caeaf012a1646", "text": "\"Stay away from leveraged or synthetic ETFs. This answer talks about why leveraged ETFs are dangerous. There are numerous articles to be found by searching for \"\"leveraged etf\"\". My answer to this question links to one of the more accessible explanations I've read.\"", "title": "" }, { "docid": "4e6c72b6fbf4a531c9d0cc225f1b2e1d", "text": "One of the key things to look for is trading volume. I think the price spread will be better on high volume ETFs, which means you'll be able to sell for more when the time comes. Check Google or Yahoo finance for those stats.", "title": "" }, { "docid": "9680062e8d91759cbf38b661420710a6", "text": "\"As with ANY investment the first answer is....do not invest in any that you do not fully understand. ETF's are very versatile and can be used for many different people for many different parts of their portfolio, so I don't think there can be a blanket statement of \"\"this\"\" one is good or bad for all.\"", "title": "" } ]	[ { "docid": "80df8f80a32972fa0445cd1e0d529ac9", "text": "This is the chart going back to the first full year of this fund. To answer your question - yes, a low cost ETF or Mutual fund is fine. Why not go right to an S&P index? VOO has a .05% expense. Why attracted you to a choice that lagged the S&P by $18,000 over this 21 year period? (And yes, past performance, yada, yada, but that warning is appropriate for the opposite example. When you show a fund that beat the S&P short term, say 5 years, its run may be over. But this fund lagged the S&P by a significant margin over 2 decades, what makes you think this will change?", "title": "" }, { "docid": "32f8ed7f56090d35f8e7317aa23eaf3f", "text": "\"Bit hesitant to put this in an answer as I don't know if specific investment advice is appropriate, but this has grown way too long for a comment. The typical answer given for people who don't have the time, experience, knowledge or inclination to pick specific stocks to hold should instead invest in ETFs (exchange-traded index funds.) What these basically do is attempt to simulate a particular market or stock exchange. An S&P 500 index fund will (generally) attempt to hold shares in the stocks that make up that index. They only have to follow an index, not try to beat it so are called \"\"passively\"\" managed. They have very low expense ratios (far below 1%) and are considered a good choice for investors who want to hold stock without significant effort or expense and who's main goal is time in the market. It's a contentious topic but on average an index (and therefore an index fund) will go even with or outperform most actively managed funds. With a sufficiently long investment horizon, which you have, these may be ideal for you. Trading in ETFs is also typically cheap because they are traded like stock. There are plenty of low-fee online brokers and virtually all will allow trading in ETFs. My broker even has a list of several hundred popular ETFs that can be traded for free. The golden rule in investing is that you should never buy into something you don't understand. Don't buy individual stock with little information: it's often little more than gambling. The same goes for trading platforms like Loyal3. Don't use them unless you know their business model and what they stand to gain from your custom. As mentioned I can trade certain funds for free with my broker, but I know why they can offer that and how they're still making money.\"", "title": "" }, { "docid": "f824112e5846e465882fb442b9ec6dd2", "text": "\"As an exercise, I want to give this a shot. I'm not involved in a firm that cares about liquidity so all this stuff is outside my purview. As I understand it, it goes something like this: buy side fund puts an order to the market as a whole (all or most possibly exchanges). HFTs see that order hit the first exchange but have connectivity to exchanges further down the pipe that is faster than the buy side fund. They immediately send their own order in, which reaches exchanges and executes before the buy side fund's order can. They immediately put up an ask, and buy side fund's order hits that ask and is filled (I guess I'm assuming the order was a market order from the beginning). This is in effect the HFT front running the buy side fund. Is this accurate? Even if true, whether I have a genuine issue with this... I'm not sure. Has anyone on the \"\"pro-HFT\"\" side written a solid rebuttal to Lewis and Katsuyama that has solid research behind it?\"", "title": "" }, { "docid": "f104aaaa262a368acdac8f46ddc2c436", "text": "Index funds: Some of the funds listed by US SIF are index funds. ETFs: ETFdb has a list, though it's pretty short at the moment.", "title": "" }, { "docid": "66b6d7651ba92fdc726761af5e89c6f9", "text": "\"I made an investing mistake many (eight?) years ago. Specifically, I invested a very large sum of money in a certain triple leveraged ETF (the asset has not yet been sold, but the value has decreased to maybe one 8th or 5th of the original amount). I thought the risk involved was the volatility--I didn't realize that due to the nature of the asset the value would be constantly decreasing towards zero! Anyhow, my question is what to do next? I would advise you to sell it ASAP. You didn't mention what ETF it is, but chances are you will continue to lose money. The complicating factor is that I have since moved out of the United States and am living abroad (i.e. Japan). I am permanent resident of my host country, I have a steady salary that is paid by a company incorporated in my host country, and pay taxes to the host government. I file a tax return to the U.S. Government each year, but all my income is excluded so I do not pay any taxes. In this way, I do not think that I can write anything off on my U.S. tax return. Also, I have absolutely no idea if I would be able to write off any losses on my Japanese tax return (I've entrusted all the family tax issues to my wife). Would this be possible? I can't answer this question but you seem to be looking for information on \"\"cross-border tax harvesting\"\". If Google doesn't yield useful results, I'd suggest you talk to an accountant who is familiar with the relevant tax codes. Are there any other available options (that would not involve having to tell my wife about the loss, which would be inevitable if I were to go the tax write-off route in Japan)? This is off topic but you should probably have an honest conversation with your wife regardless. If I continue to hold onto this asset the value will decrease lower and lower. Any suggestions as to what to do? See above: close your position ASAP For more information on the pitfalls of leveraged ETFs (FINRA) What happens if I hold longer than one trading day? While there may be trading and hedging strategies that justify holding these investments longer than a day, buy-and-hold investors with an intermediate or long-term time horizon should carefully consider whether these ETFs are appropriate for their portfolio. As discussed above, because leveraged and inverse ETFs reset each day, their performance can quickly diverge from the performance of the underlying index or benchmark. In other words, it is possible that you could suffer significant losses even if the long-term performance of the index showed a gain.\"", "title": "" }, { "docid": "9834bdc362754f1f5c411c9cedadb7bf", "text": "Agree with Michael here. The exchanges help you more than they will hurt. It begs the question why you want to avoid exchanges and the brokers since they do provide a valuable service. If you want to avoid big fees, most of the discount brokerages have tiny fees these days (optionshouse is down to $4), plus many have deals where you get 60 or more trades for free.", "title": "" }, { "docid": "b13d7ac82c5befb55fd314984545bbf5", "text": "\"I used to use etfconnect before they went paid and started concentrating on closed end funds. These days my source of information is spread out. The primary source about the instrument (ETF) itself is etfdb, backed by information from Morningstar and Yahoo Finance. For comparison charts Google Finance can't be beat. For actual solid details about a specific ETF, would check read the prospectus from the managing firm itself. One other comment, never trust a site that \"\"tells you\"\" which securities to buy. The idea is that you need sources of solid information about financial instruments to make a decision, not a site that makes the decision for you. This is due to the fact that everyone has different strategies and goals for their money and a single site saying buy X sell Y will probably lead you to lose your money.\"", "title": "" }, { "docid": "2c44d62e3ce8df5859c2428ecb00f5a3", "text": "Note that many funds just track indexes. In that case, you essentially don't have to worry about the fund manager making bad decisions. In general, the statistics are very clear that you want to avoid any actively managed fund. There are many funds that are good all-in-one investments. If you are in Canada, for example, Canadian Couch Potato recommends the Tangerine Investment Funds. The fees are a little high, but if you don't have a huge investment, one of these funds would be a good choice and appropriate for 100% of your investment. If you have a larger investment, to the point that Tangerine's MER scares you a little, you still may well look at a three or four fund (or ETF) portfolio. You may choose to use an actively-managed fund even though you know there's virtually no chance it'll beat a fund that just tracks an index, long-term. In that case, I'd recommend devoting only a small portion of your portfolio to this fund. Many people suggest speculating with no more than 10% of your combined investment. Note that other people are more positive on actively-managed funds.", "title": "" }, { "docid": "9ea59d67dcb34045c7694a346a08d840", "text": "SeekingAlpha has a section dedicated to Short ETFs as well as others. In there you will find SH, and SDS. Both of which are inverse to the S&P 500. Edit: I linked to charts that compare SH and SDS to SPY.", "title": "" }, { "docid": "0a0abff4a29bb7980683feabb76108a1", "text": "\"While @JB's \"\"yes\"\" is correct, a few more points to consider: There is no tax penalty for withdrawing any time from a taxable investment, that is, one not using specific tax protections like 401k/IRA or ESA or HSA. But you do pay tax on any income or gain distributions you receive from a taxable investment in a fund (except interest on tax-exempt aka \"\"municipal\"\" bonds), and any net capital gains you realize when selling (or technically redeeming for non-ETF funds). Just like you do for dividends and interest and gains on non-fund taxable investments. Many funds have a sales charge or \"\"load\"\" which means you will very likely lose money if you sell quickly typically within at least several months and usually a year or more, and even some no-load funds, to discourage rapid trading that makes their management more difficult (and costly), have a \"\"contingent sales charge\"\" if you sell after less than a stated period like 3 months or 6 months. For funds that largely or entirely invest in equities or longer term bonds, the share value/price is practically certain to fluctuate up and down, and if you sell during a \"\"down\"\" period you will lose money; if \"\"liquid\"\" means you want to take out money anytime without waiting for the market to move, you might want funds focussing on short-term bonds, especially government bonds, and \"\"money market\"\" funds which hold only very short bonds (usually duration under 90 days), which have much more stable prices (but lower returns over the longer term).\"", "title": "" }, { "docid": "793ccb71f403b6df10f6d9e5aeef7d72", "text": "Bond ETFs are just another way to buy a bond mutual fund. An ETF lets you trade mutual fund shares the way you trade stocks, in small share-size increments. The content of this answer applies equally to both stock and bond funds. If you are intending to buy and hold these securities, your main concerns should be purchase fees and expense ratios. Different brokerages will charge you different amounts to purchase these securities. Some brokerages have their own mutual funds for which they charge no trading fees, but they charge trading fees for ETFs. Brokerage A will let you buy Brokerage A's mutual funds for no trading fee but will charge a fee if you purchase Brokerage B's mutual fund in your Brokerage A account. Some brokerages have multiple classes of the same mutual fund. For example, Vanguard for many of its mutual funds has an Investor class (minimum $3,000 initial investment), Admiral class (minimum $10,000 initial investment), and an ETF (share price as initial investment). Investor class has the highest expense ratio (ER). Admiral class and the ETF generally have much lower ER, usually the same number. For example, Vanguard's Total Bond Market Index mutual fund has Investor class (symbol VBMFX) with 0.16% ER, Admiral (symbol VBTLX) with 0.06% ER, and ETF (symbol BND) with 0.06% ER (same as Admiral). See Vanguard ETF/mutual fund comparison page. Note that you can initially buy Investor class shares with Vanguard and Vanguard will automatically convert them to the lower-ER Admiral class shares when your investment has grown to the Admiral threshold. Choosing your broker and your funds may end up being more important than choosing the form of mutual fund versus ETF. Some brokers charge very high purchase/redemption fees for mutual funds. Many brokers have no ETFs that they will trade for free. Between funds, index funds are passively managed and are just designed to track a certain index; they have lower ERs. Actively managed funds are run by managers who try to beat the market; they have higher ERs and tend to actually fall below the performance of index funds, a double whammy. See also Vanguard's explanation of mutual funds vs. ETFs at Vanguard. See also Investopedia's explanation of mutual funds vs. ETFs in general.", "title": "" }, { "docid": "83019dc6c425172c79135e3a453e0f56", "text": "\"I recommend avoiding trading directly in commodities futures and options. If you're not prepared to learn a lot about how futures markets and trading works, it will be an experience fraught with pitfalls and lost money – and I am speaking from experience. Looking at stock-exchange listed products is a reasonable approach for an individual investor desiring added diversification for their portfolio. Still, exercise caution and know what you're buying. It's easy to access many commodity-based exchange-traded funds (ETFs) on North American stock exchanges. If you already have low-cost access to U.S. markets, consider this option – but be mindful of currency conversion costs, etc. Yet, there is also a European-based company, ETF Securities, headquartered in Jersey, Channel Islands, which offers many exchange-traded funds on European exchanges such as London and Frankfurt. ETF Securities started in 2003 by first offering a gold commodity exchange-traded fund. I also found the following: London Stock Exchange: Frequently Asked Questions about ETCs. The LSE ETC FAQ specifically mentions \"\"ETF Securities\"\" by name, and addresses questions such as how/where they are regulated, what happens to investments if \"\"ETF Securities\"\" were to go bankrupt, etc. I hope this helps, but please, do your own due diligence.\"", "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": "d2ee45566bdfe71aa642ed965b2bc49e", "text": "\"There are some index funds out there like this - generally they are called \"\"equal weight\"\" funds. For example, the Rydex S&P Equal-Weight ETF. Rydex also has several other equal weight sector funds\"", "title": "" }, { "docid": "658da749635d3d732d9faa1a74195a60", "text": "Options are contractual instruments. Most options you'll run into are contracts which allow you to buy or sell stock at a given price at some time in the future, if you feel like it (it gives you the option). These are Call and Put options, respectively (for buying the stock and selling the stock). If you have a lot of money in an index fund ETF, you may be able to protect your portfolio against a market decline by (e.g.) buying Put options against the ETF for a substantially lower price than the index fund currently trades at. If the market crashes and your fund falls in value significantly, you can exercise the options, selling the fund at the price that your option has specified (to the counter-party of your contract). This is the risk that the option mitigates against. Even if you don't have one particular fund with your investments, you could still buy a put option on a similar fund, and resell it to another person in lieu of exercise (they would be capable of buying the stock and performing the exercise themselves for profit if necessary). In general, if you are buying an option for safety, it should be an option either on something you own, or something whose price behavior will mimic something you own. You will note that options are linked to the price of stocks. Futures are contracts whose values are linked to the price of other things, typically commodities such as oil, gold, or orange juice. Their behaviors may diverge. With an option you can have a contractual guarantee on the exact investment you're trying to protect. (Additionally, many commodities' value may fall at the same time that stock investments fall: during economic contractions which reduce industrial activity, resulting in lower profits for firms and less demand for commodities.) You may also note that there are other structures that options may have - PUT options on index funds or similar instruments are probably most specifically relevant to your interests. The downside of protecting yourself with options is that it costs money to buy this option, and the option eventually expires, so you may lose money. Essentially, you are buying safety and risk-tolerance from the option contract's counterparty, and safety is not free. I cannot inform you what level of safety is appropriate for your portfolio's needs, but more safety is more expensive.", "title": "" } ]	fiqa
7ca9ebcdfc0e42db5a730b4003281f86	Should I switch to this high rate checking account for my emergency fund?	[ { "docid": "bc0868f993b2fbc3bd7ab7251dc90b69", "text": "I do this, and as you say the biggest downside is not having a separate account for your savings. If you're the type of person who struggles with restraint this is not for you. On the other hand this type of account gives more interest than any other type of US Checking or Savings account I've seen, so you will benefit from the interest.", "title": "" }, { "docid": "c30523deb4e43b91af3bc6186bbdedf7", "text": "\"Check out the \"\"rewards checking\"\" accounts listed on this thread at fatwallet finance forums. You could easily get 3.5% - 4% right now if you are willing to do the rewards checking dance. If not, you should look into the 1-2% accounts at the top. I use Alliant CU and their website is nice (and they give you your credit score every six months).\"", "title": "" }, { "docid": "663e63cd3eeb3bc4767f5bf67af15d76", "text": "If you're relatively certain that you're going to meet the requirements, it sounds like a good move for you. The #1 priority with emergency funds should be easy access to the money when you need it. Before the current economic situation, money market funds were great for this since they preserved the value of the dollars you put in. Now the rates on money market accounts are barely better than the 0.2% you're currently getting.", "title": "" }, { "docid": "34e5558ac152aca03def0ccadb6b56a6", "text": "I would also check into whether you can keep using your credit card instead of switching to a debit card tied to your checking account. The credit card provides you protection from someone wiping your account out. Most banks will help you get the money back if this happens while using a debit card. But you are out the money while the bank figures out who is wrong. In the credit cards case none of your money is actually taken from your account while you dispute the charge. I also agree with the others that having all your money in one account is more difficult to keep real spending money separate from emergency fund money.", "title": "" } ]	[ { "docid": "78b866346dad4ae9859949c7e4c33b55", "text": "There are a lot of open questions about if this is your only accessible money or if you have other emergency funds, and if you have any retirements savings and when do you plan to retire, but leaving this all aside: You currently pay 2.65% on the mortgage, and you make less on savings (maybe 1 or 1.5%). So putting the savings into the mortgage makes you the difference, which is a good deal. However, you need to reflect this with your risk-averisty, and your long term goals, and look at potential even better deals. For example, you could put the savings into higher risk/higher gain investments (let’s assume index funds), and make 6 - 10% per year in average. That obviously is a lot more. Why would you not want to do that? Investing like this is a long term plan. If this is your only savings/emergency fund, or if you need the money within the next five years, you should not do it; it could catch you in a bad market situation, and then it might be a severe loss. If you are sure you don’t need it for at least five if not ten years, invest it and keep the mortgage, you will easily beat its interest rate. If you are risk-averse, and can’t sleep with your savings doing loopings while you watch, that is also not a plan for you. There are many things to consider, and your personal situation is relevant for the decision. Consider all options, and be sure to always have a emergency fund remaining. It is also not black and white - there are options in between of your two propositions - pay some in, and keep some for emergencies.", "title": "" }, { "docid": "a79f8bc8c214b05f8019784e6ee277da", "text": "Duffbeer703 covers most everything. The entire point of an emergency fund IS for it to be liquid. Now I do understand (if you feel your situation requires over 6 months of living expenses): That is a lot of money to have sitting in a statement savings account! Under no circumstances should you take any sort of risk with an emergency fund. However, you COULD do this: Invest some of the assets in a six month, 1 year or 2 year CD if returns were enough to be worthwhile. If you don't need the money, then fine, great. But if you do, you can break a Certificate of Deposit before maturity. There will be a penalty fee. You might lose interest too. But you'll have access to your money, no liquidity risk. So maybe you could put most, say 60% of your rainy day funds in truly liquid assets. The remainder could be in longer term CD's which you hopefully won't need because you'll be back to non rainy day living again.", "title": "" }, { "docid": "af1d3cfb1e1f06493e0d3358116d4882", "text": "\"There's a cliche, \"\"out of the frying pan and into the fire\"\". I've never had the occasion to use it till now. I understand some people find they have a dozen cards and struggle to keep organized. An extra percent or two seems worth the feeling of just one payment to make. In your case, 3 checks (or online payments) per month shouldn't push you to a bad decision. Twice the interest? No thanks. Just make the minimum payments on the two lower rate cards, and pay all you can to the highest rate. Do all you can to cut expenses. The only way out of this is to change your habits avoiding what got you here in the first place.\"", "title": "" }, { "docid": "d8f8b586137024aa1835b2138547c2d8", "text": "\"The most important thing to look at is the FDIC insurance. Savings accounts are covered. Money markets - not necessarily. Online savings accounts provide rates of ~1%. Look at American Express, Ally, Capitol One, ING Direct, E*Trade, etc. The \"\"pledge\"\" basically brings EverBank into the same list, as they all have similar rates. Being top 5% of competitive accounts is not that hard, because there are thousands of banks around, you know. 0.76 is not the highest rate available. American Express currently give 1% on their savings account. Re moving the money a lot - depends on the amounts, but when the rates were higher, I moved around a lot. Now, it just doesn't worth the trouble, although I would move for 0.25%.\"", "title": "" }, { "docid": "b8d347f46e81ba0f67ad4363338c0677", "text": "Here are my conditions for an emergency account: A compromise would be to have 1,000-2,000 in a very liquid account and the rest in something a little less liquid that maybe has a minimum balance (but no transaction requirements). The behavioral risk is when you do have an emergency and you don't want to cash out or go through any hassle to get it out, so you just charge the emergency instead of paying cash.", "title": "" }, { "docid": "1987a4c02059deb3b349f0f1ebff01a3", "text": "Savings accounts with 8% APY? Unheard of these days. You're lucky if you find one at 1%. You should use checking and savings accounts only to hold an emergency fund (6 to 12 months of living expenses), or money that you will need in 2 years or so. The rest, invest in stocks and bonds.", "title": "" }, { "docid": "346c33dc312a12045a763dfadf35366c", "text": "\"From a quick look at sources on the web, it looks to me like Money Market Accounts and savings accounts are both paying about the same rate today: around 1%, give or take maybe 0.4%. I suppose that's better than nothing, but it's not a whole lot better than nothing. (I saw several savings accounts advertising 0.1% interest. If they mailed you a check, the postage could be more than the returns.) Personally, I keep a modest amount of emergency cash in my checking account, and I put my \"\"savings\"\" in a very safe mutual fund. That generally gets somewhere from making maybe 3% a year to losing a small amount. Certainly nothing to sing about, but better than savings or money markets. Whether you are willing to tolerate the modest risk or the sales charges is a matter for your personal situation and feelings.\"", "title": "" }, { "docid": "78d29ec1636d812761993c1efc07f934", "text": "Emergency funds are good to keep yourself out of debt, for whatever reason. Job loss is a big place where an emergency fund can help you out. It buys you time to find another job before hauling out the credit cards for your groceries, falling behind on your mortgage and car payments, etc. But it can just as easily be used for major car repairs, serious medical issues, home repairs, etc. ... anything that needs to be done quickly, and isn't a discretionary item. The bigger your cash reserves, the better, especially now that the economy is bad.", "title": "" }, { "docid": "b85a9a30cf0dbf72c89680e510ae5fc5", "text": "Consider also setting up a CD ladder. CD rates are often better than savings account rates. You have a 12-month CD that you purchase in January with a twelfth of your money, then another small one in February, then another in March.... then, when January comes around again, you a little more money to the first CD, and the ladder is complete. The idea is that you have more access to your money than one big CD, since you'll always have a CD maturing next month that you can get to in case of an emergency, and you can get better rates on a 1-year CD than on something else (with less risk of being locked into a bad interest rate). And you'll be less tempted to tap it all at once to buy some fancy car or what-not because you can't get at it all at once (without a penalty). And in a major emergency, losing a few percent of your interest for early withdrawals is likely the least of your problems.", "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": "04c21153b5d394d895d328bf75096588", "text": "Overall I think it sounds like it's worth it. It's hard to find that high of a rate on a checking account these days. It looks like you're looking at this bank, and I can see they have a few more requirements that seem a little tedious: If you don't do these things every month, then you lose the great interest rate. If you can think of an easy way to jump through these hoops and not forget, then it's probably worth it. For example, if you routinely eat out for lunch or buy a morning coffee, you can use that card to pay for it. Set yourself a recurring reminder in your calendar or smartphone to remind you to login to the online banking site. Ultimately, since this is an emergency fund, it's a good idea to keep it nice and liquid in a checking account. You're not likely going to find many other options that will give you a better (and safe) return and still keep your funds available for when you need them. In summary, it sounds like a good idea to me so long as you think you can reliably jump through their hoops.", "title": "" }, { "docid": "0fe826a1cf809e4dddefdd6a66c2f2ac", "text": "Not OP, but let's see: My money-market account is showing 0.25% interest rate. My savings account, 0.20%. And checking, 0.22%. It doesn't matter where I keep my emergency fund and what I keep my checking balance. It's making fuck-all for interest. And I need to keep a couple thousand in there because my mortgage hits for about $1600. And my monthly CC spend averages ~$3500 monthly. I simply can't keep a couple hundred in there.", "title": "" }, { "docid": "685f41d0666957a5964f2687f3f79aee", "text": "\"The \"\"Yield Pledge\"\" looks like a marketing promise to me. It may well be true, but I'm not sure it's useful. As you say, it's currently not the best account out there. If those extra $24 per $10000 are really important to you, why not do your own analysis? Put the money in the highest interest account you can find, and then every three months survey the accounts available and, if it isn't still the highest, transfer the funds to the one that is. Personally I wouldn't put that much effort in for $24, but you may be different.\"", "title": "" }, { "docid": "6a3ec9b0c7870ef5eef3a926d09037f6", "text": "\"There are no risk-free high-liquidity instruments that pay a significant amount of interest. There are some money-market accounts around that pay 1%-2%, but they often have minimum balance or transaction limits. Even if you could get 3%, on a $4K balance that would be $120 per year, or $10 per month. You can do much better than that by just going to $tarbucks two less times per month (or whatever you can cut from your expenses) and putting that into the savings account. Or work a few extra hours and increase your income. I appreciate the desire to \"\"maximize\"\" the return on your money, but in reality increasing income and reducing expenses have a much greater impact until you build up significant savings and are able to absorb more risk. Emergency funds should be highly liquid and risk-free, so traditional investments aren't appropriate vehicles for them.\"", "title": "" }, { "docid": "8961afa6a6500b768f5abbbbb4d0e6ea", "text": "This is a great idea and I can't think of any downside. The best part about it is in the future when you have built up your emergency fund beyond the maximum contributions to the Roth IRA, you can then move your Roth funds into a higher yielding investment. I might take it a step further. In addition to this, try to get a line of credit from your bank (with no annual fee). In case of emergency, you can decide if you want to take the money from your Roth or borrow from the line and pay some interest temporarily. Depending on the situation it may actually make sense to pay a little bit of interest and leave the money in the Roth, since over the long run the future earnings of that money could easily make you more than the interest you'll pay for (let's hope) a short amount of time. To really hit home why your idea is fantastic:", "title": "" } ]	fiqa
8e1a663210151cd5ee0aa9d690f361c1	Why is there so much interest on home loans?	[ { "docid": "32216e2443d313bb8c6b98953109f85d", "text": "\"APR stands for \"\"annual percentage rate.\"\" This means when you see a loan with a 6% rate, it is 6% per year. On a $100,000 mortgage, where you aren't paying much of the principal down at first, a 6% rate would have you paying nearly $6,000 in interest in the first year alone.\"", "title": "" }, { "docid": "e25e337420c113aef3d69ee5b4815c3f", "text": "Interest rates are always given annually, to make them comparable. If you prefer to calculate the rate or the total interest for the complete time, like 10 years or 15 years or 30 years, it is simple math, and it tells you the total you will pay, but it is not helpful for picking the better or even the right offer for your situation. Compare it to your car's gas mileage- what sense does it make to provide the information that a car will use 5000 gallons of gas over its lifetime? Is that better than a car that uses 6000 gallons (but may live 2 years longer?)", "title": "" } ]	[ { "docid": "b43238f7a44ef1ebe3914773ab7131b0", "text": "There are a few reasons, particularly for businesses. The first is opportunity cost. That chunk of money they have could be used to get higher returns somewhere else. If they can borrow from a bank at low interest rates to finance their ongoing operations, they can use their cash to get a higher return somewhere else. The second is credit rating. For public companies, ratings companies give high emphasis to companies with large reserves. This strengthens their ability to pay back the loan should it become necessary. A good credit rating in turn let's the company borrow money at lower rates. When a company can borrow money at low rates, it circles back to the first point where they can now put their reserves to better use. The third is leverage. Companies can use the cash they have built up to leverage into a larger investment. Assuming the investment works out, it will pay for the cost of borrowing over time. For instance let's say I have $1 million to invest. I can pay all cash for a $1 million apartment building or I can leverage that into a $3 million building. Assuming I run it well, the tenants will pay for the cost of borrowing $2 million and at the end of the term I'll be left with my $3 million building.", "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": "a4e5e4d432355e265639b5ac35bdbe3a", "text": "\"Banks make money on load origination fees. The \"\"points\"\" you pay or closing costs are the primary benefit to the banks. A vast majority of the time risks associated with the mortgage are sold to another party. FYI, the same is true with investment banks. In general, the transaction costs (which are ignored by modern finance theory) are the main thing running the incentives for the industry.\"", "title": "" }, { "docid": "fdec197055dffa8e1c0dea64c9353ba1", "text": "If you mess with the interest deduction, you take away one of the main reason for home ownership. So without the deduction we will become a nation of renters. This will only hurt communities because renters have less at stake when it comes to community prosperity.", "title": "" }, { "docid": "993e74f21978e5fdadfd067d7ee9cd47", "text": "According to my wife who used to work in the industry, since an investment mortgage is more likely to fail (they are just riskier) there are higher loan to value requirements and higher interest rates. They are just different products for different situations.", "title": "" }, { "docid": "1cf25b396336b8d45239902015ca96f3", "text": "I can think of a few reasons why they seem like a bigger deal to people than similar situations with other loans. As you point out, though, being underwater on your home loan is a less serious condition than having large student loans and a poor paying job, for example. If the student loan situation ever comes to a head, we may have people talking about student loans in hushed tones.", "title": "" }, { "docid": "2c37db4e63b781272b7a6a704f876661", "text": "Surely because higher education participation has increased there are a larger number of students with debt which means less demand for absurdly priced homes which means prices will drop to affordable levels. But we can't talk about markets working normally when it comes to home prices which always remain high! Right?", "title": "" }, { "docid": "7f3147f6adedde8e9a6bfd15489cca35", "text": "And then there is the issue of people who actually don't intend to reduce the size of their loan. They only want to pay the interest, so their debt with the bank remains constant. If you are upside down, it means you will not have the financial means to remove the debt. If, for some reason, you are no longer able to pay the bank, you might lose the house. After that you will have no house, but you still have a debt with the bank.", "title": "" }, { "docid": "99c768a2572426fd23b4feda32756c24", "text": "It also reduces risk from the bank's eyes. Believe it or not, they do lose out when people don't pay on their mortgages. Take the big 3 (Wells, Chase and BoA). If they have 50 million mortgages between the 3 of them and 20% of people at one point won't be able to pay their mortgage due to loss of income or other factors, this presents a risk factor. Although interest payments are still good, reducing their principal and interest keeps them tied down for additional (or sometimes shorter) time, but now they are more likely to keep getting those payments. That's why credit cards back in 07 and 08 reduced limits for customers. The risk factor is huge now for these financial institutions. Do your research, sometimes a refi isn't the best option. Sometimes it is.", "title": "" }, { "docid": "b8d815174889601581e7a93298b8cf93", "text": "A lot of loans are taken out on a fixed rate basis, so the rate is part of the contract and is therefore covered by contract law. If the loan is taken out on a variable basis then in principle the rate can rise within the terms of the contract. If a particular lender tries to raise its rates out of line with the market then its customers will seek alternative, cheaper, loans and pay off their expensive loan if they can. If rates rise sharply in general due to unusual politico-economic circumstances then those with variable rate loans can find themselves in severe trouble. For example the base rate in the UK (and therefore variable mortgage rates closely tied to it) spiked sharply in the late 80s which caused severe stress to a lot of borrowers and undoubtedly pushed some into financial difficulties.", "title": "" }, { "docid": "28501cd5cb256a4222ed10711419d979", "text": "\"Interest rates are at a record low and the government is printing money. You can get a fixed rate loan at a rate equal to inflation in a healthy economy. Unless you know that you are moving in < 5 years, why would you expose yourself to interest rate risk when rates are about as close to zero as they can be? If your thought with respect to mitigating interest rate risk is: \"\"What's the big deal, I'll just refinance!\"\", think again, because in a market where rates are climbing, you may not be able to affordably refinance at the LTV that you'll have in 5-7 years. From 1974-1991, 30 year mortgages never fell below 9%, and were over 12% from 1979 to 1985. Think about what those kinds of rates -- which reduce a new homeowner's buying power by over 40%, would do to your homes value.\"", "title": "" }, { "docid": "4756eab6ac2200618ce3994a7c1fc7a3", "text": "That really depends on the lender, and in the current climate this is extremely unlikely. In the past it was possible to get a loan which is higher than the value of the house (deposit considered), usually on the basis that the buyer is going to improve the property (extend, renovate, etc.) and this increase the value of the property. Responsible lenders required some evidence of the plans to do this, but less responsible ones simply seem to have given the money. Here in the UK this was often based on the assumption that property value tends to rise relatively quickly anyway so a seemingly-reasonable addition to the loan on top of the current value of the property will quickly be covered. That meant that indeed some people have been able to get a loan which is higher than the cost of the purchase, even without concrete plans to actively increase the value of the property. Today the situation is quite different, lenders are a lot more careful and I can't see this happening. All that aside - had it been possible, is it a good idea? I find it difficult to come up with a blanket rule, it really depends on many factors - On the one hand mortgage interest rates tend to be significantly lower than shorter term interest rates and from that point of view, it makes sense, right?! However - they are usually very long term, often with limited ability to overpay, which means the interest will be paid over a longer period of time.", "title": "" }, { "docid": "8ff81d9f59ff081e30dc8aab9c2e1e17", "text": "There is a significant tie between housing prices and mortgage rates. As such, don't assume low mortgage rates mean you will be financially better off if you buy now, since housing prices are inversely correlated with mortgage rates. This isn't a huge correlation - it's R-squared is a bit under 20%, at a 1.5-2 year lag - but there is a significant connection there. Particularly in that 10%+ era (see chart at end of post for details) in 1979-1982, there was a dramatic drop in housing price growth that corresponded with high interest rates. There is a second major factor here, though, one that is likely much more important: why the interest rates are at 10%. Interest rates are largely set to follow the Federal Funds rate (the rate at which the Federal Reserve loans to banks). That rate is set higher for essentially one purpose: to combat inflation. Higher interest rates means less borrowing, slower economic growth, and most importantly, a slower increase in the money supply - all of which come together to prevent inflation. Those 10% (and higher!) rates you heard about? Those were in the 70's and early 80's. Anyone remember the Jimmy Carter years? Inflation in the period from 1979 to 1981 averaged over 10%. Inflation in the 70s from 1973 to 1982 averaged nearly 9% annually. That meant your dollar this year was worth only $0.90 next year - which means inevitably a higher cost of borrowing. In addition to simply keeping pace with inflation, the Fed also uses the rate as a carrot/stick to control US inflation. They weren't as good at that in the 70s - they misread economic indicators in the late 1970s significantly, lowering rates dramatically in 1975-1977 (from ~12% to ~5%). This led to the dramatic double-digit inflation of the 1979-1981 period, requiring them to raise rates to astronomic levels - nearly 20% at one point. Yeah, I hope nobody bought a house on a fixed-rate mortgage from 1979-1981. The Fed has gotten a lot more careful over the years - Alan Greenspan largely was responsible for the shift in policy which seems to have been quite effective from the mid 1980s to the present (though he's long gone from his spot on the Fed board). Despite significant economic changes in both directions, inflation has been kept largely under control since then, and since 1991 have been keeping pretty steady around 6% or less. The current rate (around 0%) is unlikely to stay around forever - that would lead to massive inflation, eventually - but it's reasonable to say that prolonged periods over 10% are unlikely in the medium term. Further, if inflation did spike (and with it, your interest rates), salaries tend to spike also. Not quite as fast as inflation - in fact, that's a major reason a small positive inflation around 2-3% is important, to allow for wages to grow more slowly for poorer performers - but still, at 10% inflation the average wage will climb at a fairly similar pace. Thus, you'd be able to buy more house - or, perhaps a better idea, save more money for a house that you can then buy a few years down the road when rates drop. Ultimately, the advice here is to not worry too much about interest rates. Buy a house when you're ready, and buy the house you're ready for. Interest rates may rise, but if so it's likely due to an increase in inflation and thus wage growth; and it would take a major shift in the economy for rates to rise to the 10-11% level. If that did happen, housing prices (or at least growth in prices) would likely drop significantly. Some further references:", "title": "" }, { "docid": "271d50999a71a5a43299095b7e9d0717", "text": "\"Usually not the total interest, but all interest accrued and unpaid to date. This is called the \"\"Loan Payoff Amount\"\", and repays the bank their principal plus the \"\"true\"\" cost of capital on that principal since your last amortized payment (which is probably never, since you just signed the loan papers). There may also be a \"\"prepayment penalty\"\". This is something that should have been disclosed to you if it exists, but it's fairly rare in U.S. mortgages anymore. The theory is, the bank got the money they paid you at the start of the loan by selling a bond package backed by your mortgage and others of similar credit history and/or about the same time (a \"\"mortgage-backed security\"\"). By turning around and paying early, you meet your obligation, but the bank is now stuck with at least 10 years of quarterly coupon payments on that bond, which they were expecting to pay using your mortgage interest. For their trouble, you would pay an additional amount that either covers their \"\"call price\"\" on the portion of the bonds used for your principal, or simply buys them the time to re-issue a new mortgage using your repaid principal to back the bond again. In the modern housing market, such a prepayment penalty is very rare, because so many lenders are willing to give you a mortgage without one, and so many buyers balk at the thought of having to pay more if they pay early; the whole point is to pay less by paying early. Just something to look up in your mortgage documentation.\"", "title": "" }, { "docid": "71df35279dd16d9ed7815f5c99e94554", "text": "In most cases there is no debt attached to those properties, so there is no risk to financial institutions. So that leaves us with an increase in supply of houses most people can't afford at current prices, expect a short-term boost to construction while many are converted to duplex/apartment type properties and slight downward pressure on prices. Obviously these are wild generalisations and the effect will be massively different in most cities compared to rural or small-town areas.", "title": "" } ]	fiqa
2bd07561b45e7bd95621f1571c25e6a7	Dad paying for my new home in cash. How can I buy the house from him?	[ { "docid": "be6853c1db86ff9b8a4c1e63e2b9ef4a", "text": "You are going to need a lawyer anyway so check with him. But here is a path you might be able to go down. Put the house in your name right from the get go. He gives you the money but you sign over a promissory note to him so that you net less than $14000 (gift tax annual exclusion for the calendar year). He can gift everyone in your household 14k per year tax free and he could gift it to you and your partner in less than 7 years. You can pay him back in anyway you like or not at all as the promissory note could be reduced by 28k per year. I think a CPA and lawyer in your state would be able to confirm that this would work for you.", "title": "" }, { "docid": "e4a49c99f29bd7a819096a688f3d66cf", "text": "You have four basic options.", "title": "" }, { "docid": "4b9d593b1a04755bdf0903d4018edc79", "text": "Presumably this house is a great deal for you for some reason if you are willing to go to great lengths such as these to acquire it. I suggest you have your father purchase the house with cash, then you purchase the house from him. You might want to discuss this with the title company, it's possible that there are some fees that they will waive if you close both sales through them in a short period of time. If the home will appraise for a higher amount than purchase, then you may be able to get a mortgage without a significant down-payment. If not, then you will need to owe your father at least the amount of the down-payment at closing time.", "title": "" }, { "docid": "c89cf1c6e8abe3866cae50a53b47197a", "text": "we have little money in cash for a down-payment This is a red flag to me. If you have little money in cash for a down-payment, how are you supposed to be a landlord too? You could try is to do a lease to own from your Dad. Get a renter into the other home for at least a year or more and then close on the house once your financial situation improves. You still have the same problem of being a landlord. Another option is to receive a gift letter from your Dad since he is gifting the money on the home. It might extend your closing a little bit so you can get an appraisal done and loan application. This to me is the most sane option.", "title": "" }, { "docid": "f051c34569b2e60927e850eb92ba8135", "text": "\"There are quite some options, but without additional information, I can only provide examples. Last year I had the option to buy a house, but I decided against it because in my area it is getting harder and harder every year to sell it at a reasonable price. But if I had bought a house, my mother would have lent me the money, with me paying it back to her over the years on 3% interest. So it would have been some kind of a private loan. But my mom would never have taken ownership of the house, since it was not her intention to own it in any way. (Does your dad intend to own the house and rent it to you? If yes, and if you are comfortable with renting instead of buying, then this is an option.) The second option, the one we discarded because of the additional cost, is that I could have taken a loan, paying 4.5% interest to the bank, which would then pay under 1% to my mom, and keep the rest. Banks always want to make profit, and this profit has to come from somewhere - from the difference between the interest rates. If your dad has 230k on the bank, and you owe 230k to the bank, you are better off if you keep the bank out - at least as long as your dad is comfortable with lending you money, and you are comfortable with owing him money. (my gf would never borough money from her mother, because her mother would always play the \"\"you are in my debt\"\" card - on each and every visit, and whenever she needed help in any way...) So the key is: What does your dad feel comfy with - and what do you feel comfy with. If possible, keep the banks out, but set up a written contract between you and your dad.\"", "title": "" } ]	[ { "docid": "81e342c136e42889bfda2dc7f69297bf", "text": "No It's not a loan. It's an equity investment. Think of it as a business. The parents bought 75% of the equity with $115K, and are entitled to 75% of the sale proceeds, should you someday liquidate the business (i.e. selling the house). The $500 per month is just business revenue and is paid to your parents as a dividend. Imagine you rent it out to your self and charge a $666.66 rent - you take 25% of that back and give your parents the rest. Like any equity investment, the risk for them is that if the value of the house goes down, they will have to shoulder the loss. And you are right, there is no way to build equity. You already sold that to your parents.", "title": "" }, { "docid": "73a1ac0732a8ea4eda8102457e94cdf7", "text": "\"Your dad may have paid an \"\"opportunity cost\"\" for that outright purchase. If the money he saved had been invested elsewhere, he may have made more money. If he was that well off, then his interest rate should have been the lowest possible. My own father is a multi-millionaire (not myself) and he could afford to have paid for his house outright. He didn't though. To do so would have meant cashing in on several investments. I don't know his interest rate but let's say it was 2.5%. If he invests that million dollars into something he expects to get a 7% return on in the same period, then he would make more money by borrowing the money. Hence, he would be paying an opportunity cost. Assuming you need to work, some jobs will also do background or credit checks. Credit cards can be used by well off people to actually make them money by offering rewards (compared to straight cash transactions). The better your credit history, the better the cards/rewards you can get. You can build that credit history better by having these loans and making timely payments.\"", "title": "" }, { "docid": "518cb6ee8a76cbf5dcdd784be6dc8bc5", "text": "As the other answers suggest, there are a number of ways of going about it and the correct one will be dependent on your situation (amount of equity in your current house, cashflow primarily, amount of time between purchase and sale). If you have a fair amount of equity (for example, $50K mortgage remaining on a house valued at $300K), I'll propose an option that's similar to bridge financing: Place an offer on your new house. Use some of your equity as part of the down payment (eg, $130K). Use some more of your equity as a cash buffer to allow you pay two mortgages in between the purchase and the sale (eg, $30K). The way this would be executed is that your existing mortgage would be discharged and replaced with larger mortgage. The proceeds of that mortgage would be split between the down payment and cash as you desire. Between the closing of your purchase and the closing of your sale, you'll be paying two mortgages and you'll be responsible for two properties. Not fun, but your cash buffer is there to sustain you through this. When the sale of your new home closes, you'll be breaking the mortgage on that house. When you get the proceeds of the sale, it would be a good time to use any lump sum/prepayment privileges you have on the mortgage of the new house. You'll be paying legal fees for each transaction and penalties for each mortgage you break. However, the interest rates will be lower than bridge financing. For this reason, this approach will likely be cheaper than bridge financing only if the time between the closing of the two deals is fairly long (eg, at least 6 months), and the penalties for breaking mortgages are reasonable (eg, 3 months interest). You would need the help of a good mortgage broker and a good lawyer, but you would also have to do your own due diligence - remember that brokers receive a commission for each mortgage they sell. If you won't have any problems selling your current house quickly, bridge financing is likely a better deal. If you need to hold on to it for a while because you need to fix things up or it will be harder to sell, you can consider this approach.", "title": "" }, { "docid": "17e78480112a308574692e1fc00fecfe", "text": "\"While you would probably not use your ATM card to buy a $1M worth mansion, I've heard urban legends about people who bought a house on a credit card. While can't say its reliable, I wouldn't be surprised that some have actual factual basis. I myself had put a car down-payment on my credit card, and had I paid the sticker price, the dealer would definitely have no problem with putting the whole car on the credit card (and my limits would allow it, even for a luxury brand). The instruments are the same. There's nothing special you need to have to pay a million dollars. You just write a lot of zeroes on your check, but you don't need a special check for that. Large amounts of money are transferred electronically (wire-transfers), which is also something that \"\"regular\"\" people do once or twice in their lives. What might be different is the way these purchases are financed. Rich people are not necessarily rich with cash. Most likely, they're rich with equity: own something that's worth a lot. In this case, instead of a mortgage secured by the house, they can take a loan secured by the stocks they own. This way, they don't actually cash out of the investment, yet get cash from its value. It is similarly to what we, regular mortals, do with our equity in primary residence and HELOCs. So it is not at all uncommon that a billionaire will in fact have tons of money owed in loans. Why? Because the billions owned are owned through stock valuation, and the cash used is basically a loan secured by these stocks. It might happen that the stocks securing the loans become worthless, and that will definitely be a problem both to the (now ex-)billionaire and the bank. But until then, they can get cash from their investment without cashing out and without paying taxes. And if they're lucky enough to die before they need to repay the loans - they saved tons on money on taxes.\"", "title": "" }, { "docid": "07e74d5b629763a3259948816631fa40", "text": "I agree with you that you need to consolidate this debt using a loan. It may be hard to find a bank or credit organization that will give you an unsecured personal loan for that much money. I know of one, called Lending Club (Disclaimer - I'm an investor on this platform. Not trying to advertise, it's just the only place I know of off the top of my head) that facilitates loans like this, but instead of a bank financing the loan, the loan is split up accross hundreds of investors who each contribute a small amount (such as $25). They have rates anywhere between 5-30%, based on your credit profile(s), and I believe they have some loan amounts that go up to the area that you're discussing. Regarding buying the house - The best thing you can do when trying to buy a house is to save up a 20% downpayment, if at all possible. Below this amount, you may be asked to pay for 'PMI' - Private Mortgage Insurance. This is a charge that doesn't go away for quite a while (until you've paid them 20% of the appraised value of the home), where you pay a premium because you didn't have the 20% downpayment for the house. I would suggest you try to eliminate your credit card debt as soon as possible, and would recommend the same for your father. Getting your utilization down and reconsolidating the large debts with a loan will help to reduce interest charges and get you a reasonable, fixed payment. Whether you decide to pay off your own balances using your savings account is up to you; if it were me, personally, I'd do so immediately rather than trying to pay it off over time. But if you lose money to taxes by withdrawing the money from your 'tax free savings account', it may not be a beneficial situation. Treat debt, especially credit card debt, like an emergency at all times, and you'll find yourself in a better place as a result. Credit card debt and balances are and should be temporary, and their rates and fees are structured that way. If, for any reason, you expect that a credit card's balance will remain for an extended period of time, you may want to consider whether it would be advantageous for you to consolidate the debt into a loan, instead.", "title": "" }, { "docid": "acded3f57c57d7806634d47fe67f0b32", "text": "Open an account for yourself at this credit union: https://www.alliantcreditunion.org/ Very easy to qualify and they have free service to send money directly to your dad's bank account overnight.", "title": "" }, { "docid": "8d280f9654cc7e6f9132494b19bc1d4f", "text": "Not long after college in my new job I bought a used car with payments, I have never done that since. I just don't like having a car payment. I have bought every car since then with cash. You should never borrow money to buy a car There are several things that come into play when buying a car. When you are shopping with cash you tend to be more conservative with your purchases look at this Study on Credit card purchases. A Dunn & Bradstreet study found that people spend 12-18% more when using credit cards than when using cash. And McDonald's found that the average transaction rose from $4.50 to $7.00 when customers used plastic instead of cash. I would bet you if you had $27,000 dollars cash in your hand you wouldn't buy that car. You'd find a better deal, and or a cheaper car. When you finance it, it just doesn't seem to hurt as bad. Even though it's worse because now you are paying interest. A new car is just insanity unless you have a high net worth, at least seven figures. Your $27,000 car in 5 years will be worth about $6500. That's like striking a match to $340 dollars a month, you can't afford to lose that much money. Pay Cash If you lose your job, get hurt, or any number of things that can cost you money or reduce your income, it's no problem with a paid for car. They don't repo paid for cars. You have so much more flexibility when you don't have payments. You mention you have 10k in cash, and a $2000 a month positive cash flow. I would find a deal on a 8000 - 9000 car I would not buy from a dealer. Sell the car you have put that money with the positive cash flow and every other dime you can get at your student loans and any other debt you have, keep renting cheap keep the college lifestyle (broke) until you are completely out of debt. Then I would save for a house. Finally I would read this Dave Ramsey book, if I would have read this at your age, I would literally be a millionaire by now, I'm 37. Don't buy from a dealer Find a private sale car that you can get a deal on, pay less than Kelly Blue Book. Pay a little money $50 - 75 to have an automotive technician to check it out for you and get a car fax, to make sure there are no major problems. I have worked in the automotive industry for 20 + years and you rarely get a good deal from a dealer. “Everything popular is wrong.” Oscar Wilde", "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": "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": "d19970a098e698738f59751a42ff9e9d", "text": "\"What you're looking at is something called \"\"Bridge-Financing\"\". Essentially, it allows you to borrow your down-payment from the bank, using your old home as collateral. The interest rate varies, but if you get the bridge from the same institution as your new mortgage, they will often be a bit flexible. You take possession of the new home, and begin mortgage payments on it normally. When the old home is sold, the bridge is paid off. Note that the deposit on signing for the new house will still have to be cash. All bets are off if you are talking about a NEW new home, as builders usually require advance payments during the build.\"", "title": "" }, { "docid": "8f5edaf050073a30873a26e45ce82a3a", "text": "\"How can I use a house I own free and clear to purchase another home? Answer: walk in to any bank, that's any bank, or any lending institution. State that you own a house free and clear. This will happen: In all jurisdictions, it's incredibly easy to borrow large amounts of money at the lowest possible rate, once you own a house outright. On top of that, you want to spend the money on another house (as opposed to s sports car or the like), so you have even more equity. Winner! Your main question will be this. Say your current house (owned outright!) is worth $500,000. Go to a bank or lender, and say to them, \"\"How much money will you give me to buy house B putting both the houses on the mortgage.\"\" One bank will say \"\"fantastic! buy any house you want up to $400,000!\"\" Another will say \"\"$450,000!\"\" another will say \"\"$300,000!\"\" In a hot market another will say \"\"$650,000!\"\". So shop around and see who will give you the most.\"", "title": "" }, { "docid": "5b75e922955ba35d021aa1fdbfdaeebc", "text": "\"There are several areas of passive fraud by being unclear on what you are doing. When a citizen buys a house, the mortgage lender wants all the details as to how the buyer rounded up the money. That is so they can use their own formulas to assess the buyer's creditworthiness and the probability that the buyer will be able to keep up on payments, taxes and maintenance; or have they overextended themselves. The fraud is in the withholding of that info. By way of tricking them into making a favorable decision, when they might not have if they'd had all the facts. Then there's making this sound all lovey-dovey, good intentions, no strings attached, no expectations. You're lying to yourself. What you've actually done is put money between yourselves, because you have not laid down FAIR rules to cover every possibility. You're not willing to plan for failure because you don't want to admit failure is possible, which is vain. Once you leap into this bell jar, the uncertainty of \"\"what happens if...\"\" will intrude itself into everyone's thoughts, slowly corroding your relationship. It's a recipe for disaster. That uncertainty puts her in a very uncomfortable position. She has to labor to make sure the issue doesn't explode, so she's tiptoeing around you to avoid fights. Every fight, she'll wonder if you'll play the breakup card and threaten to demand the money back. The money will literally come between you. This is what money does. Thinking otherwise is a young person's mistake of inexperience. Don't take my word on it, contact Suze Orman and see what she says. Your lender is also not going to like those poorly defined lovers' promises, because they've seen it all before, and don't want to yet again foreclose on a house that fighting lovers trashed. (it's like, superhero battles are awesome unless you own the building they trashed.) This thing can still be done, but to remove this fraud of wishful thinking, you need to scrupulously plan for every possibility, agree to outcomes that are fair and achievable, put it in writing and share it with a neutral third party. You haven't done it, because it seems like it would be awkward as hell - and it will be! - Or it will test your relationship by forcing direct honesty about a bunch of things you haven't talked about or are afraid to - and it will! - And to be blunt, your relationship may not be able to survive that much honesty. But if it does, you'll be in much better shape. The other passive fraud is taxes. By not defining the characteristics of the payment, you fog up the question of how your contribution will be taxed (if it will be taxed). A proper contract with each other will settle that. (there's an argument to be made for involving a tax advisor in the design of that contract, so that you can work things to your advantage.) As an example, defining the payment as \"\"rent\"\" is about the worst you could do, as you will not be able to deduct any home expenses, she will need to pay income tax on the rent, but she can cannot take landlord's tax deductions on anything but the fraction of the house which is exclusively in your control; i.e. none.\"", "title": "" }, { "docid": "8920dfc811304724fd604a06d0c91b13", "text": "Ok, have your father 'sell' you the house with a RECORDED land contract for x dollars and a gift of equity(GOE) of y. He writes of the max he can each year for the GOE (ask a tax attorney on this one), and your cousin lends him the money for his FL prop. Consult a tax attorney on the capital gains, but you can write off the actualized gains at sale if you LIVED in the prop for 2 of the last 5 or 7 years (I can't remember) and were on title. Years later, you use the recorded land contract, with the verifiable on time payments you've been making, to a conforming lender and do a R&T refi.", "title": "" }, { "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": "b1e115ac713a46e238a12376ba07844d", "text": "\"It would have to be made as a \"\"gift\"\", and then the return would be a \"\"gift\"\" back to you, because you're not allowed to use a loan for a down payment. I see some problems, but different ones than you do: One more question: is the market really hot right now? It was quite cold for the last few years.\"", "title": "" } ]	fiqa
c6991dff17d81382f0a53aa597bbe3e4	How should I choose an additional retirement investment plan?	[ { "docid": "2cd8cd5586f3543bb30dd788f5298a3e", "text": "\"It's a hard decision to make. Especially without knowing the complete contract details. I would in general stay away from financial \"\"advisors\"\" like tecis or other pyramid selling companies (\"\"Strukturvertriebe\"\" in german). They usually only offer a very limited range of products. In most cases they sell only 1 or 2 products and tell everyone that these offers are the best and fit exactly to the client. I would prefer an insurance broker (requires an education) which could in theory offer any product. Coming to your situation: If you already have a Riester product which is maxed out, I see no point in another private insurance without any aid. The insurance construction allows you to save some taxes but it does cost you a premium. I would buy the funds (preferable ETFs) on my own. This comes down to the question: Does the insurance construction payoff for you for the costs it generates?\"", "title": "" } ]	[ { "docid": "679be605950dfa4c18994648a37208cd", "text": "So, first -- good job on making a thorough checklist of things to look into. And onto your questions -- is this a worthwhile process? Even independent of specific investing goals, learning how to research is valuable. If you decided to forgo investing in stocks directly, and chose to only invest in index funds, the same type of research skills would be useful. (Not to mention that such discipline would come in handy in other fields as well.) What other 80/20 'low hanging fruit' knowledge have I missed? While it may not count as 'low hanging fruit', one thing that stands out to me is there's no mention of what competition a company has in its field. For example, a company may be doing well today, but you may see signs that it's consistently losing ground to its competition. While that alone may not dissuade you from investing, it may give you something to consider. Is what I've got so far any good? or am I totally missing the point. Your cheat sheet seems pretty good to me. But a lot depends on what your goals are. If you're doing this solely for your education and experience, I would say you've done well. If you're looking to invest in a company that is involved in a field you're passionate about, you're on the right track. But you should probably consider expanding your cheat sheet to include things that are not 'low hanging fruit' but still matter to you. However, I'd echo the comments that have already been made and suggest that if this is for retirement investments, take the skills you've developed in creating your cheat sheet and apply that work towards finding a set of index funds that meet your criteria. Otherwise happy hunting!", "title": "" }, { "docid": "8ea3fa55dc99d74165a2688fa631cbe1", "text": "Don't over think about your choices. The most important thing to start now and keep adjusting and tuning your portfolio as you move along in your life. Each individual's situation is unique. Start with something simple and straight forward, like 100 - your age, in Total Stock market Index fund and the remaining total bond market index fund. For your 401k, at least contribute so much as to get the maximum employer match. Its always good if you can contribute the yearly maximum in your 401k or IRA. Once you have built up a substantial amount of assets (~ $50k+) then its time to think more about asset allocation and start buying into more specific investments as needed. Remember to keep your investment expenses low by using index funds. Also remember to factor in tax implications on your investment decisions. eg. buying an REIT fund in a tax advantaged account like 40k is more tax efficient than buying it in a normal brokerage account.", "title": "" }, { "docid": "fa5d7fc90781b75afd3e03ba8cc686cb", "text": "\"There are a lot of funds that exist only to feed people's belief that existing funds are not diversified or specialized enough. That's why you have so many options. Just choose the ones with the lowest fees. I'd suggest the following: I wouldn't mess around with funds that try and specialize in \"\"value\"\" or those target date funds. If you really don't want to think and don't mind paying slightly higher fees, just pick the target date fund that corresponds to when you will retire and put all your money there. On the traditional/Roth question, if your tax bracket will be higher when you retire than it is now (unlikely), choose Roth. Otherwise choose traditional.\"", "title": "" }, { "docid": "019436e3750e0037cce98d04021422c0", "text": "the whole room basically jumped on me I really have an issue with this. Someone providing advice should offer data, and guidance. Not bully you or attack you. You offer 3 choices. And I see intelligent answers advising you against #1. But I don't believe these are the only choices. My 401(k) has an S&P fund, a short term bond fund, and about 8 other choices including foreign, small cap, etc. I may be mistaken, but I thought regulations forced more choices. From the 2 choices, S&P and short term bond, I can create a stock bond mix to my liking. With respect to the 2 answers here, I agree, 100% might not be wise, but 50% stock may be too little. Moving to such a conservative mix too young, and you'll see lower returns. I like your plan to shift more conservative as you approach retirement. Edit - in response to the disclosure of the fees - 1.18% for Aggressive, .96% for Moderate I wrote an article 5 years back, Are you 401(k)o'ed in which I discuss the level of fees that result in my suggestion to not deposit above the match. Clearly, any fee above .90% would quickly erode the average tax benefit one might expect. I also recommend you watch a PBS Frontline episode titled The Retirement Gamble It makes the point as well as I can, if not better. The benefit of a 401(k) aside from the match (which you should never pass up) is the ability to take advantage of the difference in your marginal tax rate at retirement vs when earned. For the typical taxpayer, this means working and taking those deposits at the 25% bracket, and in retirement, withdrawing at 15%. When you invest in a fund with a fee above 1%, you can see it will wipe out the difference over time. An investor can pay .05% for the VOO ETF, paying as much over an investing lifetime, say 50 years, as you will pay in just over 2 years. They jumped on you? People pushing funds with these fees should be in jail, not offering financial advice.", "title": "" }, { "docid": "56290eb39d292df78b8af33f4e308903", "text": "Mostly you nailed it. It's a good question, and the points you raise are excellent and comprise good analysis. Probably the biggest drawback is if you don't agree with the asset allocation strategy. It may be too much/too little into stocks/bonds/international/cash. I am kind of in this boat. My 401K offers very little choices in funds, but offers Vanguard target funds. These tend to be a bit too conservative for my taste, so I actually put money in the 2060 target fund. If I live that long, I will be 94 in 2060. So if the target funds are a bit too aggressive for you, move down in years. If they are a bit too conservative, move up.", "title": "" }, { "docid": "b36177c86a000963a421bfef2ab82829", "text": "I use the self-directed option for the 457b plan at my job, which basically allows me to invest in any mutual fund or ETF. We get Schwab as a broker, so the commissions are reasonable. Personally, I think it's great, because some of the funds offered by the core plan are limited. Generally, the trustees of your plan are going to limit your investment options, as participants generally make poor investment choices (even within the limited options available in a 401k) and may sue the employer after losing their savings. If I was a decision-maker in this area, there is no way I would ever sign off to allowing employees to mess around with options.", "title": "" }, { "docid": "f4169e685a12d264278d31530c50068e", "text": "Here is a nice overview from Vanguard on some options for a small business owner to offer retirement accounts. https://investor.vanguard.com/what-we-offer/small-business/compare-plans I would look over the chart and decide which avenue is best for you and then call around to investment companies (Vanguard, Fidelity, etc. etc.) asking for pricing information.", "title": "" }, { "docid": "8439491878fa8722c81dcce170268652", "text": "Your approach sounds solid to me. Alternatively, if (as appears to be the case) then you might want to consider devoting your tax-advantaged accounts to tax-inefficient investments, such as REITs and high-yield bond funds. That way your investments that generate non-capital-gain (i.e. tax-expensive) income are safe from the IRS until retirement (or forever). And your investments that generate only capital gains income are safe until you sell them (and then they're tax-cheap anyway). Of course, since there aren't really that many tax-expensive investment vehicles (especially not for a young person), you may still have room in your retirement accounts after allocating all the money you feel comfortable putting into REITs and junk bonds. In that case, the article I linked above ranks investment types by tax-efficiency so you can figure out the next best thing to put into your IRA, then the next, etc.", "title": "" }, { "docid": "515d2284f6f0b2b40aac463a34dff86d", "text": "This advice will be too specific, but... With the non-retirement funds, start by paying off the car loan if it's more than ~3% interest rate. The remainder: looks like a good emergency fund. If you don't have one of those yet, you do now. Store it in the best interest-bearing savings account you can find (probably accessible by online banking). If you wish to grow your emergency fund beyond $14-20,000 you might also consider some bonds, to boost your returns and add a little risk (but not nearly as much risk as stocks). With the Roth IRA - first of all, toss the precious metals. Precious metals are a crisis hedge and an advanced speculative instrument, not a beginner's investment strategy for 40% of the portfolio. You're either going to use this money for retirement, or your down payment fund. If it's retirement: you're 28; even with a kid on the way, you can afford to take risks in the retirement portfolio. Put it in either a targe-date fund or a series of index funds with an asset allocation suggested by an asset-allocation-suggestion calculator. You should probably have north of 80% stocks if it's money for retirement. If you're starting a down-payment fund, or want to save for something similar, or if you want to treat the IRA money like it's a down-payment fund, either use one of these Vanguard LifeStrategy funds or something that's structured to do the same sort of thing. I'm throwing Vanguard links at you because they have the funds with the low expense ratios. You can use Vanguard at your discretion if it's all an IRA (and not a 401(k)). Feel free to use an alternative, but watch the expense ratios lest they consume up to half your returns.", "title": "" }, { "docid": "8133d6a9ecbe9ede5f95a4d892211277", "text": "Your plan sounds quite sound to me. I think that between the choices of [$800 for Loans, $300 for Retirement] and [$1100 for loans], both are good choices and you aren't going to go wrong either way. Some of the factors you might want to consider: I like your retirement savings choices - I myself use the admiral version of VOO, plus a slightly specialized but still large ETF that allows me to do a bit of shifting. Having something that's at least a bit counter-market can be helpful for balancing (so something that will be going up some when the market overall is down some); I wouldn't necessarily do bonds at your age, but international markets are good for that, or a stock ETF that's more stable than the overall market. If you're using Vanguard, look at the minimums for buying Admiral shares (usually a few grand) and aim to get those if possible, as they have significantly lower fees - though VOO seems to pretty much tie the admiral version (VFIAX) so in that case it may not matter so much. As far as the target retirement funds, you can certainly do those, but I prefer not to; they have somewhat higher (though for Vanguard not crazy high) expense ratios. Realistically you can do the same yourself quite easily.", "title": "" }, { "docid": "e0181b5b73cc89e56d3146f077981403", "text": "You need a find a financial planner that will create a plan for you for a fixed fee. They will help you determine the best course of action taking into account the pension, the 403B, and any other sources of income you have, or will have. They will know how to address the risk that you have that that particular pension. They will help you determine how to invest your money to produce the type of retirement you want, while making sure you are likely to not outlive your portfolio.", "title": "" }, { "docid": "99eba4415aa6c54b1c570948f430d5de", "text": "Set up budget categories. Earmark your income as it is paid, for your budget categories. Pay your bills and expenses. For debts, pay the minimum on everything. There will be an amount left once everything is budgeted. That's the 'extra'. Then focus on, in order of priority, the following: So, when your emergency fund is up to an appropriate level (3-6 months of living expenses as a rule of thumb, adjusted according to your comfort level). Once you have your emergency fund started, budget at least enough toward your 401k to capture any matching offered by your employer. Then use the snowball plan to pay off your debts. (From what your post says, this does not apply to you, but you may have some small credit card debts taht were not discussed). Earmark the 'extra' for the smallest debt first. When that debt is paid, the 'extra' grows by the minimum payment of the smallest. Thus the snowball grows as you pay off debts. Once the debts are gone, reward yourself, within reason (and without going into debt). Now shift your extra into fully funding your retirement savings. Consult a financial advisor to help you plan how to distribute your retirement savings across the available retirement savings types. They can explain why it's good to have some of your retirement savings funded from after tax income. They can help you find the balance between pre- and post-tax funded accounts. Eventually, you may come to the point where you're putting the max allowed into your tax advantaged retirement accounts. At your age, this is a significant achievement. Anything left over after retirement savings is funded can be used for whatever you want. If you choose wealth building, it can lead to financial independence. The first two should be a one time thing. You can/should do more than one at a time. The fourth one is optional, and should not be considered until 1 and 2 are completed, and 3 is maxed out. What you achieve is up to you. Look up FIRE, or Financially independent, retire early. There are groups of folks striving for this. They share advice on frugal living and wealth building strategies. The goal is to save enough capital to live off the passive income of interest and dividends. Most of them seem to have pre-50 target ages. At your age and income, you could hit a pre-40 goal. But it takes commitment and a certain type of personality. Not for me but it might be for you.", "title": "" }, { "docid": "516c2d122e4ea621f52e35fbf8647cce", "text": "My figuring (and I'm not an expert here, but I think this is basic math) is: Let's say you had a windfall of $1000 extra dollars today that you could either: a. Use to pay down your mortgage b. Put into some kind of equity mutual fund Maybe you have 20 years left on your mortgage. So your return on investment with choice A is whatever your mortgage interest rate is, compounded monthly or daily. Interest rates are low now, but who knows what they'll be in the future. On the other hand, you should get more return out of an equity mutual fund investment, so I'd say B is your better choice, except: But that's also the other reason why I favour B over A. Let's say you lose your job a year from now. Your bank won't be too lenient with you paying your mortgage, even if you paid it off quicker than originally agreed. But if that money is in mutual funds, you have access to it, and it buys you time when you really need it. People might say that you can always get a second mortgage to get the equity out of it, but try getting a second mortgage when you've just lost your job.", "title": "" }, { "docid": "b2c9d55800920d12987fec8518dbba0a", "text": "\"That depends, really. Generally speaking, though - Roth IRAs are THE PLACE for Stock-Market/Mutual-Fund investing. All the off the wall (or, not so off the wall) things like Real Estate investments, or buying up gold, or whatever other ideas you hear from people - they may be good or bad or whatnot. But your Roth IRA is maybe not the best place for that sort of thing. The whole philosophy behind IRAs is to deliberately set aside money for the future. Anything reasonable will work for this. Explore interesting investment ideas with today's money, not tomorrow's money. That being said - at your age I would go for the riskier options within what's available. If I were in your situation (and I have been, recently), I would lean toward low-fee mutual funds classified as \"\"Growth\"\" funds. My own personal opinion (THIS IS NOT ADVICE) is that Small Cap International funds are the place to be for young folks. That's a generalized opinion based on my feel for the world, but I don't think I'm personally competent to start making specific stock picks. So, mutual funds makes sense to me in that I can select the fund that generally aligns with my sense of things, and assume that their managers will make reasonably sound decisions within that framework. Of course that assumption has to be backed up with reputation of the specific MF company and the comparative performance of the fund relative to other funds in the same sector. As to the generalized question (how else can you work toward financial stability and independence), outside of your Roth IRA: find ways to boost your earning potential over time, and buy a house before the next bubble (within the next 18 months, I'm GUESSING).\"", "title": "" }, { "docid": "ba92dda80ec4ee9b2a01658aad4269a3", "text": "\"The policy you quoted suggests you deposit 6% minimum. That $6,000 will cost you $4,500 due to the tax effect, yet after the match, you'll have $9,000 in the account. Taxable on withdrawal, but a great boost to the account. The question of where is less clear. There must be more than the 2 choices you mention. Most plans have 'too many' choices. This segues into my focus on expenses. A few years back, PBS Frontline aired a program titled The Retirement Gamble, in which fund expenses were discussed, with a focus on how an extra 1% in expenses will wipe out an extra 1/3 of your wealth in a 40 year period. Very simple to illustrate this - go to a calculator and enter .99 raised to the power of 40. .669 is the result. My 401(k) has an expense of .02% (that's 1/50 of 1%) .9998 raised to the same 40 gives .992, in other words, a cost of .8% over the full 40 years. My wife and I are just retired, and will have less in expenses for the rest of our lives than the average account cost for just 1 year. In your situation, the knee-jerk reaction is to tell you to maximize the 401(k) deposit at the current (2016) $18,000. That might be appropriate, but I'd suggest you look at the expense of the S&P index (sometime called Large Cap Fund, but see the prospectus) and if it's costing much more than .75%/yr, I'd go with an IRA (Roth, if you can't deduct the traditional IRA). Much of the value of the 401(k) beyond the match is the tax differential, i.e. depositing while in the 25% bracket, but withdrawing the funds at retirement, hopefully at 15%. It doesn't take long for the extra expense and the \"\"holy cow, my 401(k) just turned decades of dividends and long term cap gains into ordinary income\"\" effect to take over. Understand this now, not 30 years hence. Last - to answer your question, 'how much'? I often recommend what may seem a cliche \"\"continue to live like a student.\"\" Half the country lives on $54K or less. There's certainly a wide gray area, but in general, a person starting out will choose one of 2 paths, living just at, or even above his means, or living way below, and saving, say, 30-40% off the top. Even 30% doesn't hit the extreme saver level. If you do this, you'll find that if/when you get married, buy a house, have kids, etc. you'll still be able to save a reasonable percent of your income toward retirement. In response to your comment, what counts as retirement savings? There's a concept used as part of the budgeting process known as the envelope system. For those who have an income where there's little discretionary money left over each month, the method of putting money aside into small buckets is a great idea. In your case, say you take me up on the 30-40% challenge. 15% of it goes to a hard and fast retirement account. The rest, to savings, according to the general order of emergency fund, 6-12 months expenses, to cover a job loss, another fund for random expenses, such as new transmission (I've never needed one, but I hear they are expensive), and then the bucket towards house down payment. Keep in mind, I have no idea where you live or what a reasonable house would cost. Regardless, a 20-25% downpayment on even a $250K house is $60K. That will take some time to save up. If the housing in your area is more, bump it accordingly. If the savings starts to grow beyond any short term needs, it gets invested towards the long term, and is treated as \"\"retirement\"\" money. There is no such thing as Saving too much. When I turned 50 and was let go from a 30 year job, I wasn't unhappy that I saved too much and could call it quits that day. Had I been saving just right, I'd have been 10 years shy of my target.\"", "title": "" } ]	fiqa
56325485f95d382ccb53d2e03d160979	Is the Chrysler extended warranty coverage worth it?	[ { "docid": "7421f097b776fb34d00007b3fe10bb32", "text": "I haven't looked at that warranty in detail, but generally speaking this should help. What is GAP insurance? In the case of a total loss/write off gap insurance covers the outstanding finance after your regular insurance pay out. The two won't match up usually because of the depreciation right after you buy the car. For example, if you take out $20,000 finance and buy a car, then write it off after six months, your insurance company may only value it at $16,000 but it's unlikely you will have cleared $4,000 from your finance. Gap insurance will pay out the difference and settle the debt. Will Chrysler change the engine, if it comes to bhore? Yes, unless they identify misuse or deliberate damage. For instance, if you do 1000 miles and the engine explodes, it's a mechanical fault that the warranty would cover. If they open up the engine/look at diagnostics and find it's been thrashed to within an inch of it's life, they may claim it was your driving which has destroyed the engine and you would have to prove it was an underlying fault and would have blown either way. Will car dents be covered with this bumper to bumper insurance? Not likely, as I mentioned in the last point, if it's your fault it wouldn't be covered. I think you may be confusing the terms insurance and warranty at this point. Insurance would cover your dents but a warranty only covers the manufacturer's faults, even in the case of extended warranties. What does basic mean in terms of warranty? Sounds obvious, but whatever Chrysler want it to mean! There's no legal definition of 'basic' so you would need to check the documents thoroughly or ask them to explain exactly what is and isn't covered. If they're reluctant, it's probably because 'basic' covers very little...", "title": "" } ]	[ { "docid": "464cbae1aff1457fc0fc804fb43863e4", "text": "I have coworker who reported that he leased a Nissan Leaf from 2013-2016 and was offered $4000 off the contracted purchase price at the end of the lease due to a glut of other lessees turning in for a lease on the newest model with greater range. It's not clear that this experience will be repeated by others three years from now, but there is enough uncertainty in the future electric car market that it's quite possible to have faster depreciation on a new vehicle than you might otherwise expect based on experience with conventional internal combustion powered vehicles. Leasing will remove that uncertainty. Purchasing a lease-return can also offer great value. I looked at the price for a lease return + a new battery with the extended range, and it was still significantly cheaper than buying a completely new vehicle.", "title": "" }, { "docid": "403294d631b330a34ef94f13a824f49d", "text": "\"My knee-jerk reaction was \"\"no, they are not worth it\"\", but I took a little time to look up what some of the trusted names in consumer electronics reviews had to say about extended warranties/service contracts. A cnet writer said that your decision should consider the price of the service contract relative to the price of the item you're buying, as well as the amount of hassle you're willing to endure, should something go wrong. Consumer Reports believes that the warranties that come with your products are almost always enough, and they say that electronics and appliances are so well-built nowadays, the likelihood of you needing extra service before you upgrade are slim-to-none. And the folks over at epinions.com offer the same maybe-yes-maybe-no advice as the cnet guys: depends on your appetite for risk and the options available to you. So I would suggest that the answer be \"\"no\"\" most of the time, but consider it anyway.\"", "title": "" }, { "docid": "fb9010f18a4e49aa74aab3af0e2b48b8", "text": "\"The general answer to any \"\"is it worth it\"\" insurance question is \"\"no,\"\" because the insurance company is making a profit on the insurance.* To decide if you want the insurance, you need to figure out how much you can afford to pay if something happens, how much they cover, and how badly you want to transfer your risk to them. If you won't have trouble coming up with the $4000 deductible should you need to, then don't get this extra insurance. * I did not mean to imply that insurance is always a bad idea or that insurance companies are cheating their customers. Please let me explain further. When you buy any product from a business, that business is making a profit. And there is nothing wrong with that at all. They are providing a service and should be compensated for their efforts. Insurance companies also provide a service, but unlike other types of businesses, their product is monetary. You pay them money now, and they might pay you money later. If they pay you more money then you spent, you came out ahead, and if you spend more money then they give you, it was a loss for you. In order for the insurance company to make a profit, they need to bring in more money than they pay out. In fact, they need to bring in a lot more money then they pay out, because in addition to their profit, they have all the overhead of running a business. As a result, on average, you will come out behind when you purchase insurance. This means that when you are on the fence about whether or not to purchase any insurance product, the default choice should be \"\"no.\"\" On average, you are financially better off without insurance. Now, that doesn't mean you should never buy insurance. As mentioned by commenter @xiaomy, insurance companies spread risk across all of their customers. If I am in a situation where I have a risk of financial ruin in a certain circumstance, I can eliminate that risk by purchasing insurance. For example, I have term life insurance, because if I were to pass away, it would be financially catastrophic for my family. (I'm hoping that the insurance company makes 100% profit on that deal!) I also continue to buy expensive health insurance because an unexpected medical event would be financially devastating. However, I always decline the extended warranty when I buy a $300 appliance, because I don't have any trouble coming up with another $300 in the unlikely event that it breaks, and I would rather keep the money than contribute to the profits of an insurance company unnecessarily. In my original answer above, I pointed out how you would determine whether or not to purchase this particular insurance product. This product pays out a bunch of relatively small amounts for certain events, up to a limit of $4000. Would this $4000 be hard for you to come up with if you needed to? If so, get the insurance. But if you are like me and have an emergency fund in place to handle things like this, then you are financially better off declining this policy.\"", "title": "" }, { "docid": "49d7df2a564c7f112e7110d4297f6f96", "text": "I know, right? What a joke. If they were a real car company, they would never acknowledge a problem and put in a repair and warrantee program that benefits the customer. When will Tesla learn to cover-up problems, and then do calculations to see if the legal costs they will pay due to the problem are more than the cost of fixing the problem? What a joke of a company.", "title": "" }, { "docid": "c9a065ed30ff915be1b10120f9fb8152", "text": "I've put 75K miles on my 2013 Volt and it's holding up great. Solid car. I've got a pre-reveal Model 3 reservation, and I'm reluctant to trade the Volt in. Looks like I'll have to make that decision pretty soon.", "title": "" }, { "docid": "eba53fd80c5837cfce7101bde3dca035", "text": "The first 10-30k may have some issues. Nissan had frame / battery problems with the first 30k Leaf's.This is the reason that the first 10k T3 will be going to employees. Second 10k to loyal Model S / X owners and third 10k to buyers in CA near the factory. I have a friend that had one of the first Model X, it took almost a year to work out all of the issues, but everything is working now and they are happy!", "title": "" }, { "docid": "1a9b3e0a93ed53db45c09ac5106b70d0", "text": "Consumers got what they paid for and Tesla put better equipment than necessary inside to A. Assist with resale value and B. Lessen manufacturing costs. The side effect is longer battery life and the option to upgrade without needing service. It's kind of a win win win win.", "title": "" }, { "docid": "8a1f39931d478f146422f20709cd9041", "text": "\"Ditto other answers, but I'd add there's a lot of psychology going on in a sale. If you're paying cash, you presumably have a pretty fixed upper limit on what you can spend. But if you're getting a loan, a large increase in the price of the car may sound like just a small addition to the monthly payment. Also, these days dealers often try to roll \"\"extended warranties\"\" into the loan payment. Most people can't calculate loan amortizations in their heads -- I'm pretty good at math, and I need a calculator to work it out, assuming I remember or wrote down the formula -- a dealer can often stick a piece of paper in front of you saying \"\"Loan payment: $X per month\"\" with fine print that says that includes $50 for the extended warranty, and most people would just say, \"\"oh, okay\"\".\"", "title": "" }, { "docid": "59203d7869768ceb481d019ec026eddd", "text": "\"The good news about maintenance is that there's much less scheduled maintenance because the cars are mechanically much simpler. See the official service schedule. Most of it is just \"\"rotate tires / replace cabin air filter\"\". The brake and suspension systems are very similar to those of a normal car and require comparable maintenance. The bad news is the battery will decay over time and is a major component of the cost of the car. From that link: In the UK, the LEAF’s standard battery capacity loss warranty is for 60,000 miles or five years So you should factor your warrantied battery lifetime into the depreciation calculation. I don't think there are going to be many ten- or twenty- year old electric cars from the current crop in 2030 or 2040 as they're still improving dramatically year-on-year. (Slightly too long for a comment, slightly too short for a proper answer)\"", "title": "" }, { "docid": "84a8d60f42a6c234b8c259c0b7425e96", "text": "One thing to consider: the Apple service plan covers replacement of the battery in addition to the normal things you expect. Since the battey is not consumer replaceable, and, according to what I hear, is almost certain to wear out within the two year life of the phone, and is more expensive to have Apple replace than the extended coverage, it's probably worth it. (Disclaimer: this was told to me by my son who used an iPhone for two years before I got mine. I haven't independently verifies his facts. This also applied to the 3G and 3GS. I'm just assuming it's also true for the 4.)", "title": "" }, { "docid": "afdc13cf37d3aac53e192165a6e6f1a0", "text": "I suspect this is done at least in part in response to [this review by Edmunds](http://www.edmunds.com/tesla/model-s/2013/long-term-road-test/wrap-up.html) and a [similar one by Consumer Reports](http://www.consumerreports.org/cro/news/2014/08/consumer-reports-tesla-model-s-has-more-than-its-share-of-problems/index.htm) where they describe the number of problems Tesla had over 1 year of ownership. Esp in the Edmunds review, if you scroll down part way down the article, you'll see the number of powertrain part replacements that were done; it's quite substantial.", "title": "" }, { "docid": "3818fe9bb023c347f74da394e87c2c71", "text": "\"In general, if you can afford to replace something, you are able to \"\"self-insure\"\". You really want to understand a little of the statistics before you can make a generic call, but my rule of thumb is that insurance via \"\"extended warranty\"\" is rarely a good deal. Here is a simple expected value math formula you can apply (when the > is true, then you should buy it): replacement cost x likelihood of using warranty % > cost of insurance You can then back-compute, what is the likelihood that I'd need to lose this item to break even? Given your numbers: $2000 x Y > $350 or Y > (350/2000) or Y > 17.5% So if you think there is a 17.5% or greater chance that you'll need to have you system replaced (i.e. not just a simple fix) AND (as Scott pointed out) you'll be able to actually use the replacement warranty then the applecare is a good purchase. Note, this only applies to items you can replace out-of-pocket without significant burden, because if you didn't have the $10k to replace your car, it wouldn't matter if the insurance wasn't such a good deal (especially if you need the car to get to work, etc.) So the obvious question is: \"\"Why would a for-profit company ever offer insurance on something they are statistically likely to lose money on?\"\" The obvious answer is \"\"they wouldn't,\"\" but that doesn't mean you should never buy this type of insurance, because you may have statistically significant circumstances. For instance, I purchased a $40 remote helicopter as a gift for my children. I also paid the $5 for a \"\"no questions asked\"\" warranty on it because, knowing my kids, I knew there was a nearly 100% chance they would break it at least once. In this case, this warranty was well worth the $5, because they did break it! Presumably they make money on these warranties because most of the purchasers of the plan are more attentive (or too lazy to make the claim) than in this case. Edit note: I incorporated Scott's comment about likelihood of being able to utilize the warranty into a combined \"\"likelihood of using warranty\"\" term. This term could be broken up into likelihood of needing replacement x likelihood of actually getting company to replace it I didn't do this above because it makes it a little harder to understand, and may not be a major factor in all cases, but you can definitely add it after the fact (i.e. if there's only a 90% chance Applecare will pay out at all, then divide the 17.5% by 0.9 to get 19.4% likelihood of needing the replacement for it to be cost effective). More complete formulas can be derived also (including terms for full replacement costs vs repair costs and including terms for \"\"deductible\"\" type costs or shipping), but I'm trying to keep things relatively simple for those who aren't statistics nerds like I am.\"", "title": "" }, { "docid": "0e019ffa890ed2cb59a52e635dafe7f1", "text": "\"> I am confused how you spin an \"\"infinite mileage warranty\"\" into something negative It will increase their costs in a business model which, until recently, lost money on every unit. It's good news for buyers in the short term. If Tesla goes out of business, however, the infinite-mileage warranty won't make any difference. And, in the larger picture, if they're out of business, their awesome customer-focused model doesn't really benefit their customers in any way.\"", "title": "" }, { "docid": "85003e0414cf9df7ca49bf330b63a9ab", "text": "\"Short answer: Absolutely not, unless you're comfortable with putting years of your labor into a depreciating asset that will incur hefty maintenance costs over its remaining life. i.e. consider your 10K gone forever once you buy the car, and then some. Some comments on your reasons: \"\"Keeping up with spoiled brats\"\" is a losing proposition, and is a mindset counterproductive to financial independence. I'd encourage you to find a way to not care about how the spoiled brats live their lives. It won't be easier when you're older and you see your peers driving fancy cars and living fantasy lifestyles that you are tempted to emulate. Break the impulse to \"\"keep up\"\" and you'll be in a much better place. A used BMW may not be a piece of junk at first, but once you hit 100K miles, everything will suddenly fall apart and need repair. Been there myself. Still have the car after 7 years, only because very few people want to buy a high-mileage German sport sedan with recurring maintenance issues. See #2. It will be a good drive for a while, then it will own you. This is not so bad when you have a decent amount of savings, but when you have nothing, it's very hard to truly enjoy the car while knowing that any problems not covered by warranty will be financially devastating. Are you prepared to ride the bus for 4 weeks while saving enough income from work to replace a bad clutch? I had to do this, and it's not something I brag about.\"", "title": "" }, { "docid": "9660733404c6142453215fb3d053158f", "text": "In my opinion it depends on the type of product. I would get a warranty for a washing machine or tumble dryer or other product with lots of moving parts that is liable to break down. I also take into account my luck, the one washing machine I didn't get covered broke down 2 weeks outside the normal warranty period... I would not get a warranty for a consumer electronics product like a TV, PC, or iPod because they devalue so quickly. As a rule of thumb, if the model you buy today is going to be on sale for the next few years for around the same price and has moving parts, it is worth considering a warranty. If it will be worth a small percentage of its value because newer faster shinier models come along to replace it don't bother. I would also not get the warranty from the shop I bought the product from. You can get warranties for consumer products from specialist third parties that will allow you to cover multiple products for a discount. These work out a lot cheaper than the one the shop will give you. For example in the UK, DomGen will cover 3 appliances for £14.99/month and 6 for £20.99/month", "title": "" } ]	fiqa
c11ff27e38fcae7ced6b3ff3d193a2d6	Can an immigrant get a mortgage in the us?	[ { "docid": "daaca503aa30d95ef943eb99ce5fbee2", "text": "There are two Questions: Financial institutions do not care about your nationality, only your ability to pay over time. For long term debt the lender will want assurances that the borrower has the ability and means to pay the debt over time. A legal resident in the US should have no more difficulty obtaining financing than a citizen under similar life circumstances. The Lender is also under legal obligation to confirm that the borrower is who they say they are, will have the ability to pay over time AND have no malicious intent in the purchase. Persons who do not have legal status in the US, AND who do not have the means to pay for property outright will have difficulty obtaining financing as they will have trouble establishing the requirements of the Lender. This is simple math, a lender will be reluctant to lend to any person who is more likely to have difficulty paying the obligation than another. In your case Your father would be an unlikely candidate for a mortgage because he cannot establish his legal status nor can he guarantee that he will have the legal right to earn a means to pay the loan back. This puts the lender at risk both of losing the money lent AND losing the right to repossess the property if the borrower doesn't pay. Despite all of the obstacles I have indicated above, it is still possible for your father to purchase property legally, but the risk and the cost go way up for him as a borrower. There may be sellers willing to finance property over time, but your father's status puts him at a disadvantage if the seller is not honest. There may be community coalitions which can help you work through the challenges of property ownership. Please see these related articles", "title": "" } ]	[ { "docid": "e8a2434e4e41ba2a70e1dd06ac106b53", "text": "The one big drawback I know is when you take the mortgage credit, your credit ability is calculated, and from that sum all of your credits are subtracted, and credit limit on credit card counts as credit... I don't know if it is worldwide praxis, but at least it is the case in Poland.", "title": "" }, { "docid": "b994b0f50c6b08e9548da99ccc0e2b00", "text": "I don't think that they ask you for your citizenship status when you apply in a dealership. At least I don't remember being asked. I know of at least 3 people from my closest circle of friends who are in various immigration statuses (including one on F1) and got an auto loan from a dealership without a problem and with good rates. They have to ask for your immigration status on online applications because of the post-9/11 law changes. Edit to allow Dilip to retract his unjustified downvote: Chase and Wells Fargo have a reliable track of extending auto loans to non-permanent residents.", "title": "" }, { "docid": "76384f87eaa0952d8425ce9d84c3dd45", "text": "\"You have figured out most of the answers for yourself and there is not much more that can be said. From a lender's viewpoint, non-immigrant students applying for car loans are not very good risks because they are going to graduate in a short time (maybe less than the loan duration which is typically three years or more) and thus may well be leaving the country before the loan is fully paid off. In your case, the issue is exacerbated by the fact that your OPT status is due to expire in about one year's time. So the issue is not whether you are a citizen, but whether the lender can be reasonably sure that you will be gainfully employed and able to make the loan payments until the loan is fully paid off. Yes, lenders care about work history and credt scores but they also care (perhaps even care more) about the prospects for steady employment and ability to make the payments until the loan is paid off. Yes, you plan on applying for a H1-B visa but that is still in the future and whether the visa status will be adjusted is still a matter with uncertain outcome. Also, these are not matters that can be explained easily in an on-line application, or in a paper application submitted by mail to a distant bank whose name you obtained from some list of \"\"lenders who have a reliable track record of extending auto loans to non-permanent residents.\"\" For this reason, I suggested in a comment that you consider applying at a credit union, especially if there is an Employees' Credit Union for those working for your employer. If you go this route, go talk to a loan officer in person rather than trying to do this on the phone. Similarly, a local bank,and especially one where you currently have an account (hopefully in good standing), is more likely to be willing to work with you. Failing all this, there is always the auto dealer's own loan offers of financing. Finally, one possibility that you might want to consider is whether a one-year lease might work for you instead of an outright purchase, and you can buy a car after your visa issue has been settled.\"", "title": "" }, { "docid": "c518372928a9ebe110d7a5c884e5c820", "text": "I am only familiar with American banks, but generally speaking, they will work with you if you can demonstrate that you have an adequate average income over a period of time. It is likely they will want a record of your income for at least the last 24 months (more would be better). The terms of the individual contracts (i.e. termination clauses, etc.) shouldn't be important as long as you have a demonstrated history of making a good income. I'd recommend finding a bank that performs manual underwriting, i.e. they actually have someone on staff that will look at your credit history, income, debt ratios, as opposed to them just generating an offer based on a computer model. Lending standards can vary quite a bit from bank to bank, and you have not listed your average annual income, so it is difficult to say whether they will offer you a mortgage, or for what amount, but you have a significant down payment. However, assuming that your numbers are good and that you can find someone intelligent to work with, it's unlikely that they will deny you simply because your income is uneven. Best of luck!", "title": "" }, { "docid": "b9300c42e6ddab9c79fd61d14d4cb061", "text": "You should also be aware that there are banks that do business in the US that do not deal with Fannie Mae, and thus are not subject to the rules about conforming loans. Here is an example of a well-known bank that lists two sets of rates, with the second being for loans of $750,000 or more (meaning the first covers everything up to that) https://home.ingdirect.com/orange-mortgage/rates", "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": "dbf8d5a2db71f056ab85223ef6589783", "text": "I did that. What is allowed changes over time, though — leading up to the crisis, lenders would approve at the flimsiest evidence. In particular, my SO had only been in the country a couple years and was at a sweet spot where lack of history was no longer counting against her. Running the numbers, the mortgage was a fraction of a percent cheaper in her name than in mine. Even though she used a “stated income” (self reported, not backed by job history) of the household, not just herself. The title was in her name, and would have cost money to have mine added later so we didn’t. This was in Texas, which is a “community property” state so after marriage for sure everything is “ours”.", "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": "7585bcca27d71994d5a2abc5fdd9ed24", "text": "Speaking from experience, yes (this was 9 years ago though and may have changed due to stricter laws). I lived in London and was moving to NYC and wanted to have a functioning bank account upon arrival. I banked in London with HSBC and asked them if they could set me up. They connected me with the right people in the US and after many forms I had a fully functional US bank account with a foreign address and without having a social security number - and I was (am) just your average person. You will most likely not be able to get a credit card through them because of lack of credit history (unless you are ridiculously rich or go for a secured credit card), but a debit card should be possible.* My advice is to talk to your local bank and see if they can help you, although it will help if they operate in the US. Good luck! *I have heard from various expats that American Express may be willing to issue cards in the states based on their existing relation with clients in other countries, but I digress. If you have an Amex in Switzerland or Sweden I would recommend talking to them.", "title": "" }, { "docid": "7060958d04aeaa00434f7d5a0d442542", "text": "Would it be worth legitimizing his business or is it too late at this point? To be blunt, you're asking if we recommend that he stop breaking the law. The answer is obviously yes, he should be declaring his income. And it would probably benefit him to get on the same page as his employer (or client) so they can both start obeying the law together. Once he's filed a tax return for 2016 that would certainly help his cause as far as a lender is concerned, and as soon as he can provide some recent pay stubs (or paid invoices) he should be ready to move forward on the mortgage based on that additional income.", "title": "" }, { "docid": "779300a60e57ff333c291551940b1bbd", "text": "\"Please clarify your question. What do you mean by \"\"..loan in Greece\"\"? If you are referring to taking a mortgage loan to purchase residential property in Greece, there are two factors to consider: If the loan originates from a Greek bank, then odds are likely that the bank will be nationalized by the government if Greece defaults. If the loan is external (i.e. from J.P. Morgan or some foreign bank), then the default will certainly affect any bank that trades/maintains Euros, but banks that are registered outside of Greece won't be nationalized. So what does nationalizing mean for your loan? You will still be expected to pay it according to the terms of the contract. I'd recommend against an adjustable rate contract since rates will certainly rise in a default situation. As for property, that's a different story. There have been reports of violence in Greece already, and if the country defaults, imposes austerity measures, etc, odds are there will be more violence that can harm your property. Furthermore, there is a remote possibility that the government can attempt to acquire your private property. Unlikely, but possible. You could sue in this scenario on property rights violations but things will be very messy from that point on. If Greece doesn't default but just exits the Euro Zone, the situation will be similar. The Drachma will be weak and confidence will be poor, and unrest is a likely outcome. These are not statements of facts but rather my opinion, because I cannot peek into the future. Nonetheless, I would advise against taking a mortgage for property in Greece at this point in time.\"", "title": "" }, { "docid": "3519245e2bbed46d3af790588ad319f8", "text": "There are a few loan programs that grant exceptions to bankruptcy requirements in the event of extenuating circumstances that can be proven to be outside of your control (i.e. massive medical bills that you used bankruptcy to settle, etc.) however, in order to make the case for this exemption, you would need to make a strong case for your solvency, shown the ability to re-establish your credit reputation since the discharge of your bankruptcy, and would almost certainly have to go through a bank that offers manual underwriting. Additionally, if you are Native American, the HUD-184 program is a great option for your situation as it allows for a wide latitude in terms of underwriter discretion and is always manually underwritten as there is no automated underwriting system developed for the loan program. There are several great lenders that offer nationwide financing (as long as you're in a HUD-184 eligible area) and would be a great potential solution if you meet the qualifying parameter of being Native American.", "title": "" }, { "docid": "1ffcc47f3210c28ba75ab76b4bbe19b0", "text": "Interesting read. If that is true then residential neighborhoods are about to become a HOT investment in RE. If millennials do move out then this also could delay a subprime auto loan mini recession. Edit: transportation into cities would increase and we haven't quite moved into the electric car market so this is a positive read for those in auto", "title": "" }, { "docid": "ba2a0873a0a994e1a55a97a56a394542", "text": "\"The answer is, unfortunately, along the lines of \"\"it depends\"\". It does depend a little on the bank - I've had a US bank account for years before moving to the US, and I didn't have an SSN or any status when I opened the account. What I did have however was an address in the US that they could send the statements to, and proof that I was living abroad (oh, and US citizen wife that had an account with the same bank). Not all banks will open a bank account for a foreigner with no status in the US, but it is generally possible. You will have to check with several banks and basically have paperwork showing your foreign address and proof of id (passport, possibly a drivers license as well).\"", "title": "" }, { "docid": "6a9ee65e23ca31bab5694a8e24912035", "text": "Yes. A mortgage is a kind of debt. Someone lends you money to buy your house, and you owe them the money, so you have debt.", "title": "" } ]	fiqa
cf935e6603e0e1dd241a92add4836046	Helping girlfriend accelerate credit score improvement	[ { "docid": "ea644dd27f3b2afa63e02f3f282f44e9", "text": "This is an all too common problem and is not easy to resolve. Divorce agreements do not alter prior mortgage contracts. Most importantly, the bank is not required, and will not normally, remove the girlfriend from the mortgage even if she quitclaimed it to her Ex. If he has abandoned the property there is a good chance he will not make any more future payments. She should be prepared to make the payments if he doesn't or expect her credit to continue to deteriorate rapidly. She needs to contact her divorce attorney to review their mutual obligations. A court can issue orders to try to force the Ex to fulfill the divorce agreement. However, a court cannot impose a change to the mortgage obligations the borrowers made to the bank. Focus on this. It's far more important than adding her to a car loan or credit card. Sorry for the bad news. As for the car loan, it's best to leave her off the loan. You will get better terms without her as a joint owner. You can add her as an additional driver for insurance purposes. Adding her to your credit cards will help her credit but not a lot if the mortgage goes to default or foreclosure.", "title": "" }, { "docid": "0bd390b162602650837587935d7d2400", "text": "\"In the short term what does it matter if she has poor credit? Just let it ride and focus on the important things. In the long term the most important part is \"\"completing the divorce\"\". That is separating all parts of her financial life from her ex-husband. This might mean she takes possession of the house and has him off the loan, or she gets off the loan and this may mean forcing a sale. If there are children or alimony involved she needs to build her income to the point that paying child support or alimony does not impact her budget. If she is on the receiving end, then she should budget so those items are bonus money and not counted on. She is flat broke and does not need to worry about borrowing money at this juncture. In this case a low credit score is a blessing.\"", "title": "" } ]	[ { "docid": "90aa732c8acaa39ca745a812f96591f0", "text": "Apart from the reasons currently given (which have to do with personal relations), wouldn't a good reason to take the loan from the bank be to build up a credit history and/or improve your credit score?", "title": "" }, { "docid": "675808629f61d92d9fa2b989e67ef4c3", "text": "\"A drop in credit score of 300 is pretty significant, right? You describe the cause of this as \"\"unfortunate circumstances\"\". Lets say you observe a mother giving a small child a ball to play with in the median of a busy interstate. Once the inevitable happens, would you also describe that as \"\"unfortunate circumstances\"\"? Because really it is the same thing. You overextended yourself and did not consider risk in the decision to borrow money. This may sound harsh, but you have proven that you cannot handle credit. So your solution is to borrow more? That makes no sense. The best thing you can do for your credit score is to reduce, then eliminate all debt.\"", "title": "" }, { "docid": "ff0eb373e33424d8d23565b07f33a629", "text": "Does the full time PHD student extend to 70-80 hours/week or more? If not, can you pick up an extra job to aid with living expenses? Also, whose name is the debt in? Is your wife paying to avoid the black mark on her credit record or her mother's? Basically what it looks like to me is that you guys currently have a car you cannot afford and that her mother doesn't seem to be able to afford either, at a ridiculous interest rate on top. Refinancing might be an option but at a payoff amount of 12k you're upside down even when it comes to the KBB retail value. I'm somewhat allergic to financing a deprecating asset (especially at a quick back of the envelope calculation suggests that she's already paid them around $18k if you are indeed three years into the loan). What I would be tempted to do in your situation is to attempt to negotiate a lower payoff to see if they're willing to settle for less and give you clean title to the car - worst thing they can say is no, but you might be able to get the car for a little less than the $12k, then preferably use your emergency money to pay off the car and put it up for sale. Use some of the money to buy her a cheaper car for, say, $4k-$5k (or less if you're mechanically inclined) and put the rest back into your emergency fund. The problem I see with refinancing it would be that it looks like you're underwater from a balance vs retail value perspective so you might have a problem finding someone to refinance it with you throwing some of your emergency money at it in the first place.", "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": "bfa0272d5b3a2671dfda9ee449eee319", "text": "\"littleadv's first comment - check the note - is really the answer. But your issue is twofold - Every mortgage I've had (over 10 in my lifetime) allows early principal payments. The extra principal can only be applied at the same time as the regular payment. Think of it this way - only at that moment is there no interest owed. If a week later you try to pay toward only principal, the system will not handle it. Pretty simple - extra principal with the payment due. In fact, any mortgage I've had that offered a monthly bill or coupon book will have that very line \"\"extra principal.\"\" By coincidence, I just did this for a mortgage on my rental. I make these payments through my bank's billpay service. I noted the extra principal in the 'notes' section of the virtual check. But again, the note will explicitly state if there's an issue with prepayments of principal. The larger issue is that your friend wishes to treat the mortgage like a bi-weekly. The bank expects the full amount as a payment and likely, has no obligation to accept anything less than the full amount. Given my first comment above here is the plan for your friend to do 99% of what she wishes: Tell her, there's nothing magic about bi-weekly, it's a budget-clever way to send the money, but over a year, it's simply paying 108% of the normal payment. If she wants to burn the mortgage faster, tell her to add what she wishes every month, even $10, it all adds up. Final note - There are two schools of thought to either extreme, (a) pay the mortgage off as fast as you can, no debt is the goal and (b) the mortgage is the lowest rate you'll ever have on borrowed money, pay it as slow as you can, and invest any extra money. I accept and respect both views. For your friend, and first group, I'm compelled to add - Be sure to deposit to your retirement account's matched funds to gain the entire match. $1 can pay toward your 6% mortgage or be doubled on deposit to $2 in your 401(k), if available. And pay off all high interest debt first. This should stand to reason, but I've seen people keep their 18% card debt while prepaying their mortgage.\"", "title": "" }, { "docid": "cfaa0623509847dbfeb78d6499835351", "text": "\"From the comments, it sounds like you have a technical background. So I'm going to suggest you think of this as a technical problem: it's an optimization problem, where the variable you're trying to optimize for is total interest paid over the lifetime of the loans. Step 1 is making sure you're using the credit available to you most efficiently. If there's room in the credit limit for card #1 to move more of your debt there, then definitely move your balances from the higher-interest cards. However, be careful; some cards will have different interest rates for balance transfers or cash advances. And definitely don't move any principal from Card #3 until the 0% interest rate expires. Pursuing a bank loan as part of step 1 is valid as well. You could start with the bank you use for your checking account today. Credit unions can be a good source of lower-interest loans as well. Ensure that you fully understand the terms and interest rates, particularly if they change. Just be careful about applying for them; too many rejections can affect your credit rating negatively. You also mention in the comments that you're paying \"\"her\"\" mortgage. I don't know how the ownership is set up there, but either refinancing or taking out a home equity loan can be a way to consolidate debt. The interest rate on a home loan will almost assuredly be less than on your higher rate cards, especially taking the tax deduction into account. Step 2 is paying down the debt efficiently. The rule here is simple: Pay the minimum payment on all cards except for the one with the highest interest rate; any money you have above the minimum payments should go into paying down the principal on that one. In your case, that's Card #2. Good luck!\"", "title": "" }, { "docid": "30c3fa9ee32741f71ad214987a63e3a0", "text": "If you keep the account in your name only and your girlfriend is depositing money into it, then she is in effect making gifts of money to you. If the total amount of such gifts exceeds $14K in 2014, she will need to file a gift tax return (IRS Form 709, due April 15 of the following year, but not included with her Federal tax return; it has to be sent to a specific IRS office as detailed in the Instructions for Form 709). She would need to pay gift tax (as computed on Form 709) unless she opts to have the excess over $14K count towards her Federal lifetime combined gift and estate tax exclusion of $5M+ and so no gift tax is due. Most estates in the US are far smaller than $5 million and pay no Federal estate tax at all and for most people, the reduction of the lifetime combined... is of no consequence. Another point (for your girlfriend to think about): if you two should break up and go your separate ways at a later time, you are under no obligation to return her money to her, and if you do choose to do so, you will need to file a gift tax return at that time. If you will be returning her contributions together with all the earnings attributable to her contributions, then keep in mind that you will have paid income taxes on those earnings all along since the account is in your name only. Finally, keep in mind that the I in IRA stands for Individual and your girlfriend is not entitled to put her contributions into your IRA account. Summary: don't do this (or open a joint account as tenants in common) no matter how much you love each other. She should open accounts in her name only and make contributions to those accounts.", "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": "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": "17959bcfa1b6b44a2e5324c302c4c977", "text": "This works even better when you have a good credit score when you want to arbitrarily inflate it for bragging rights or lowest interest rates, I'm only pointing this out because it has nothing to do with your current score and CK's recommendation. The presence of an installment loans is 10% of your credit score, according to some credit scoring models. So theoretically someone with a solid 720 score could gain 72 points, while someone with a 480 score would only gain 48 points. But the scores are weighted so you wouldn't get that kind out outcome regardless, it will have less of an impact. You can do this, amongst other things, but if that installment loan alters your utilization of credit it will more greatly lower your score, and the hard inquiry to apply for the loan will also temporarily hurt your score and you also might not be approved. These are the things to consider (but fortunately utilization has no history). Yes you can pay the loan off with a monthly payment. The loan's interest will cost slightly more than the monthly payments, by the end of the loan term. I've done this with a 5 year $500 installment loan at a credit union. As others pointed out, you don't have to spend money to raise your credit score (unnecessary interest, in this case), but you certainly can!", "title": "" }, { "docid": "737a84c075b317740b52a0f932e0261a", "text": "\"It is possible to achieve a substitute for refinancing, but because of the \"\"short\"\" life of cars at least relative to housing, there are no true refinancings. First, the entire loan will not be able to be refinanced. The balance less approximately 80% of the value of the car will have to be repaid. Cars depreciate by something like 20% per year, so $2,000 will have to be repaid. Now, you should be able to get a loan if your boyfriend has good credit, but the interest rate will not drop too much further from the current loan's rate because of your presumably bad credit rating, assumed because of your current interest rate. While this is doable, this is not a good strategy if you intend to have a long term relationship. One of the worst corruptors of a relationship is money. It will put a strain on your relationship and lower the odds of success. The optimal strategy, if the monthly payments are too high, is to try to sell the car so to buy a cheaper car. The difficulty here is that the bank will not allow this if balance of the loan exceeds the proceeds from the sale, so putting as much money towards paying the balance to allow a sale is best. As a side note, please insure your car against occurrences such as theft and damage with a deductible low enough to justify the monthly payment. It is a terrible position to have a loan, no car, and no collateral against the car.\"", "title": "" }, { "docid": "7d87c699d1503768a304fa752a29f7e3", "text": "Your score is real-time, updating every time new data hits the reporting agencies. Dilip is correct, go over 20%, and it will hit the report, but then the score returns to normal after the next bill shows a sub-20% utilization. Say your average spending is $1000, but your limit is $5000. There's no harm in asking for a small increase in the limit, or simply pay a bit toward the bill before the statement is cut. The bill and reported balance will be lower and your score, unaffected.", "title": "" }, { "docid": "6a9dd6bae4dd9b0df552ce4ddd556727", "text": "You need to pay off the entire balance of 7450 as soon as possible. This should be your primary financial goal at this point above anything else. A basic structure that you can follow is this: Is the £1500 balance with the 39.9% interest rate the obvious starting point here? Yes, that is fine. But all the cards and overdraft debts need to be treated with the same urgency! What are the prospects for improving my credit score in say the next 6-12 months enough to get a 0% balance transfer or loan for consolidation? This should not be a primary concern of yours if you want to move on with your financial life. Debt consolidation will not help you achieve the goals you have described (home ownership, financial stability). If you follow the advice here, by the time you get to the point of being eligible, you may not see enough savings in interest to make it worth the hassle. Focus on the hard stuff and pay off the balances. Is that realistic, or am I looking at a longer term struggle? You are looking at a significant struggle. If it was easy you would not be asking this question! The length of time will be determined by your choices: how aggressively you will cut your lifestyle, take on extra jobs, and place additional payments on your debt. By being that extreme, you will actually start to see progress, which will be encouraging. If you go in half-committed, your progress will show as much and it will be demotivating. Much of your success will hinge on your mental and emotional toughness to push through the hard work of delaying pleasure and paying off these balances. That is just my personal experience, so you can take it or leave it. :) The credit score will take care of itself if you follow this method, so don't worry about it. Good Luck!", "title": "" }, { "docid": "0a3635891c8b92cab85d81c3554a08fe", "text": "\"This is the best tl;dr I could make, [original](http://voxeu.org/article/credit-growth-and-global-crisis-new-narrative) reduced by 96%. (I'm a bot) *** > In a new paper, we also examine the evolution of mortgage debt and defaults during the credit boom and throughout the financial crisis and its aftermath, using individual-level data from the Federal Reserve Bank of New York Consumer Credit Panel. > While borrowers with low credit scores typically had higher default rates than those with higher credit scores, default rates for borrowers with higher credit scores rose substantially during the financial crisis. > The investor share of new delinquencies was close to 15% for all credit score quartiles throughout the credit boom and increases to 25%, 35% and 40% between 2006 and 2009 for credit score quartiles 2-4, respectively. * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/74jwyc/credit_growth_and_the_global_crisis_a_new/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~222899 tl;drs so far.\"\") \| [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") \| Top* keywords: credit^#1 score^#2 borrower^#3 quartile^#4 Mortgage^#5\"", "title": "" }, { "docid": "d9758baa2e8282051e22e60e24a3559e", "text": "\"It makes no sense to spend money unnecessarily, just for the purpose of improving your credit score. You have to stop and ask yourself the question \"\"Why do I need a good credit score?\"\" Most of the time, the answer will be \"\"so I can get a lower interest rate on (ABC loan) in the future.\"\" However, if you spend hundreds or even thousands of dollars in the present, just so that you can save a few points on a loan, you're not going to come out ahead. The car question should be considered strictly in the context of transportation expenses: \"\"It cost me $X to get around last year using Lyft. If instead I owned a car, it would have cost me $Y for gas, insurance, depreciation, parking, etc.\"\" If you come out ahead and Y < X, then buy the car. Don't jump into an expensive vehicle (which is never a good investment) or get trapped into an expensive lease which will costs you many times more than the depreciation value of a decent used car, just so that you can save a few points on a mortgage. Your best option moving forward would be to pay off your student loans first, getting rid of that interest expense. Place the remainder in savings, then start to look at a budget. Setting aside a 20% down payment on a home is considered the minimum to many people, and if that is out of reach you might need to consider other neighborhoods (less than 400K!). If you're still concerned about your credit score, a good way to build that up (once you have a budget and spending under control) is to get a credit card with no annual fees. Start putting all of your expenses on the credit card (groceries, etc), and paying off the balance IN FULL every month. By spending only what you need to within a reasonable budget, and making payments on time and in full, your credit rating will begin to gradually improve. If you have a difficult time tracking your expenses or sticking to a budget, then there is potential for danger here, as credit cards are notorious for high interest and penalties. But by keeping it under control and putting the rest toward savings, you can begin to build wealth and put yourself in a much better financial position moving into the future.\"", "title": "" } ]	fiqa
02136f0c4bc70432491ee7fbe5f54b79	First time investing in real-estate, looks decent?	[ { "docid": "700e9a72ad0e8e2ce135cbb86d64d1c0", "text": "\"Congratulations, you are in great shape financially at a very young age. Great income, nice equity in a home, and mostly debt free. It seems like you are looking at taking out a loan of 400K, and to do so you will have to put your own home at risk as you do not have the 80K cash for a down payment. Correct? It also looks like after 2.1K per year without regard to taxes, maintenance, bad tenants, or vacancies. As such this will likely be a negative cash flow situation. I would say you should plan on a 912/month cost. Are you okay with that? While your income can probably cover this, no problem, is that your objective to have this property have a negative return for the next 10-15 years or so? For me, this is a no. Way too much risk for a negative cash flow. It is hard to talk to the upside as you did not give any profit predictions and I am unsure of the market. Why would you risk jeopardizing your great financial situation with a \"\"hail mary\"\" attempt to make money? Slow down, you will get there. Save for a few years so there is no need to tap your home's equity to make a down payment. It would really bother me to owe 600K on a 121K salary (75K+20K+26K).\"", "title": "" }, { "docid": "f30788f8fb761d716f81b5eca3e2ce50", "text": "\"This might be a good idea, depending on your personality and inclinations. Key points: How close is the building to you? Do not buy any building that is more than 20 minutes travel from where you are. Do you have any real hard experience with doing construction, building maintenance and repair? Do you have tools? Example: do you have a reciprocating saw? do you know what a reciprocating saw is? If your answer to both those questions is \"\"no\"\", think twice about acquiring a property that involves renovation. Renovation costs can be crushing, especially for someone who is not an experienced carpenter and electrician. Take your estimates of costs and quadruple them. Can you still afford it? Do you want to be a landlord? Being a landlord is a job. You will be called in the middle of the night by tenants who want their toilet to get fixed and stuff like that. Is that what you want to spend your time doing, driving 20 minutes to change lightbulbs and fix toilets?\"", "title": "" } ]	[ { "docid": "b01b8a39d9dcd8a1f2f491f032e31143", "text": "I’m not an expert on the VISA/US tax or insurance, but you're making enough mistakes in terms of all the associated costs involved in owning and renting houses/apartments that this already looks potentially unwise at this stage of your investment career. Renting cheap properties/to students involves the property constantly being trashed, often being empty and requiring extremely close management (which you either have to pay someone a lot to do, or do yourself and lose other potential earning time. If doing yourself you will also make lots of mistakes in the vetting/managing/marketing process etc at first as this is a complex art in itself). Costs on this type of rental can often get as high as 25% a year depending exactly how lucky you get even if you do it all yourself, and will typically be in the 5-15% range every year once everything you have to constantly maintain, replace and redecorate is totalled up. That's all pre what you could be earning in a job etc, so if you could earn a decent clip elsewhere in the same time also have to deduct that lost potential. Send it all to third parties (so all upkeep by hired contractors, all renting by an agency) you will be lucky to even break even off ~15k a year per property rents to students. You’re not seeming to price in any transaction costs, which usually run at ~5% a time for both entrance and exit. Thats between half and one years rent gone from the ten per property on these numbers. Sell before ten is up its even more. On point three, rounding projections in house price rises to one decimal place is total gibberish – no one who actually has experience investing their own money well ever makes or relies on claims like this. No idea on Pittsburgh market but sound projections of likely asset changes is always a ranged and imprecise figure that cannot (and shouldn’t) be counted on for much. Even if it was, it’s also completely unattainable in property because you have to spend so much money on upkeep: post costs and changes in size/standard, house values generally roughly track inflation. Have a look at this chart and play around with some reasonable yearly upkeep numbers and you will see what I mean. Renting property is an absolute graveyard for inexperienced investors and if you don't know the stuff above already (and it's less than 10% of what you need to know to do this profitably vs other uses of your time), you will nearly always be better off investing the money in more passive investments like diversified bonds, REITs and Stock.", "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": "a0cd7730d095a4ebac6e95aabb354f31", "text": "Buying a property and renting it out can be a good investment if it matches your long term goals. Buying an investment property is a long term investment. A large chunk of your money will be tied up with the property and difficult to access. If you put your money into dividend producing stocks you can always sell the stock and have your money back in a matter of days this is not so with a property. (But you can always do a Home equity line of credit (HELOC)) I would also like to point out landlording is not a passive endeavor as JohnFx stated dealing with a tenant can be a lot of work. This is not work you necessarily have to deal with, it is possible to contract with a property management company that would place tenants and take care of those late night calls. Property management companies often charge 10% of your monthly rent and will eat a large portion of your profits. It could be worth the time and headache of tenant relations. You should build property management into you expenses anyway in case you decide to go that route in the future. There are good things about owning an investment property. It can produce returns in a couple of ways. If you choose this route it can be lucrative but be sure to do your homework. You must know the area you are investing very well. Know the rent, and vacancy rates for Single family homes, look at multifamily homes as a way of mitigating risk(if one unit is vacant the others are still paying).", "title": "" }, { "docid": "d9b3d137a9a7b62ce07f8c493bc452fd", "text": "\"As Yishani points out, you always have to do due diligence in buying a house. As I mentioned in this earlier post I'd highly recommend reading this book on buying a house associated with the Wall Street Journal - it clearly describes the benefits and challenges of owning a house. One key takeaway I had was - on average houses have a \"\"rate of return\"\" on par with treasury bills. Its best to buy a house if you want to live in a house, not as thinking about it as a \"\"great investment\"\". And its certainly worth the 4-6 hours it takes to read the book cover to cover.\"", "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": "" }, { "docid": "9b7f66d0deb3fe87aea9a853975b835d", "text": "I'm an Aussie and I purchased 5 of these properties from 2008 to 2010. I was looking for positive cash flow on properties for not too much upfront investment. The USA property market made sense because of the high Aussie $$ at the time, the depressed property market in the US and the expensive market here. I used an investment web-site that allowed me to screen properties by yield and after eliminating outliers, went for the city with the highest consistent yield performance. I settled on Toledo, Ohio as it had the highest yields and was severely impacted by the housing crisis. I bought my first property for $18K US which was a little over $17K AUD. The property was a duplex in great condition in a reasonable location. Monthly rentals $US900 and rents guaranteed and direct deposited into my bank account every month by section 8. Taxes $900 a year and $450 a year for water. Total return around $US8,000. My second property was a short sale in a reasonable area. The asking was $US8K and was a single family in good condition already tenanted. I went through the steps with the bank and after a few months, was the proud owner of another tenanted, positive cash flow property returning $600 a month gross. Taxes of $600 a year and water about the same. $US6K NET a year on a property that cost $AUD8K Third and fourth were two single family dwellings in good areas. These both cost $US14K each and returned $US700 a month each. $US28K for two properties that gross around $US15K a year. My fifth property was a tax foreclosure of a guy with 2 kids whose wife had left him and whose friend had stolen the money to repay the property taxes. He was basically on the bones of his butt and was staring down the barrel of being homeless with two kids. The property was in great condition in a reasonable part of town. The property cost me $4K. I signed up the previous owner in a land contract to buy his house back for $US30K. Payments over 10 years at 7% came out to around $US333 per month. I made him an offer whereby if he acted as my property manager, i would forgo the land contract payments and pay him a percentage of the rents in exchange for his services. I would also pay for any work he did on the properties. He jumped at it. Seven years later, we're still working together and he keeps the properties humming. Right now the AUD is around 80c US and looks like falling to around 65c by June 2015. Rental income in Aussie $$ is around $2750 every month. This month (Jan 2015) I have transferred my property manager's house back to him with a quit claim deed and sold the remaining houses for $US100K After taxes and commission I expect to receive in the vicinity of AUD$120K Which is pretty good for a $AUD53K investment. I've also received around $30K in rent a year. I'm of the belief I should be buying when everybody else is selling and selling when everybody else is buying. I'm on the look-out for my next positive cash flow investment and I'm thinking maybe an emerging market smashed by the oil shock. I wish you all happiness and success in your investment. Take care. VR", "title": "" }, { "docid": "0abf18cc25a8320ef87516be5b2300af", "text": "I would not claim to be a personal expert in rental property. I do have friends and family and acquaintances who run rental units for additional income and/or make a full time living at the rental business. As JoeTaxpayer points out, rentals are a cash-eating business. You need to have enough liquid funds to endure uncertainty with maintenance and vacancy costs. Often a leveraged rental will show high ROI or CAGR, but that must be balanced by your overall risk and liquidity position. I have been told that a good rule-of-thumb is to buy in cash with a target ROI of 10%. Of course, YMMV and might not be realistic for your market. It may require you to do some serious bargain hunting, which seems reasonable based on the stagnant market you described. Some examples: The main point here is assessing the risk associated with financing real estate. The ROI (or CAGR) of a financed property looks great, but consider the Net Income. A few expensive maintenance events or vacancies will quickly get you to a negative cash flow. Multiply this by a few rentals and your risk exposure is multiplied too! Note that i did not factor in appreciation based on OP information. Cash Purchase with some very rough estimates based on OP example Net Income = (RENT - TAX - MAINT) = $17200 per year Finance Purchase rough estimate with 20% down Net Income = (RENT - MORT - TAX - MAINT) = $7500 per year", "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": "bf6d612e979609c1cd11106e9f1d1353", "text": "\"Rather than thinking of becoming a landlord as a passive \"\"investment\"\" (like a bank account or mutual fund), it may be useful to think of it as \"\"starting a small part-time business\"\". While certainly many people can and do start their own businesses, and there are many success stories, there are many cases where things don't work out quite as they hoped. I wouldn't call starting any new business \"\"low risk\"\", even one that isn't expected to be one's main full-time job, though some may be \"\"acceptable risk\"\" for your particular circumstances. But if you're going to start a part-time business, is there any particular reason you'd do so in real estate as opposed to some other activity? It sounds like you'd be completely new to real estate, so perhaps for your first business you're starting you'd want it to be something you're more familiar with. Or, if you do want to enter the real estate world (or any other new business), be sure to do a lot of research, come up with a business plan, and be prepared for the possibility of losing money as with any investment or new business.\"", "title": "" }, { "docid": "00b9e39c2ab056cafe629fed477dab86", "text": "Do not borrow to invest in real estate. The interest payments will eat up most of your profit (the property management fees might eat up the rest), and you will have significant risk with tenant issues, property value, etc. Many people have made it work - many also lose everything. Real estate can be a great investment, but you can't even afford a house of your own yet, let alone investment property. Keep saving up until you have 20% down to buy a house of your own (ideally that you can put on a 15% fixed mortgage), and pay it off as quickly as you can. Then you can start saving for your first rental property. If that process isn't fast enough for you, you have two options. Increase your income or reduce your expenses. There's no shortcut to wealth-building without taking significant risks. At most I would scale back the 401(k) to the 5% match you get, but you should scale that back up once you have enough for a down payment.", "title": "" }, { "docid": "d5600bed0504562a8904efa3439539e5", "text": "I have taken the free Kiyosaki evening course, and it does give some good information. It is an upsell to the $500 weekend course, which I also took. That course taught me enough about real-estate investing to get started. I have not yet had the need to pursue his other, more expensive courses. Read his books, take the $500 course, read other people's books on real estate investing, talk to other like-minded individuals, and gain some experience. I understand real estate better than I understand paper assets because I spent more time studying real estate. If you want to invest in real estate, study it first. If you want to invest in paper assets, study those first.", "title": "" }, { "docid": "b3e94cc42dcf1f9e62f72f804069018e", "text": "Seems like a bad deal to me. But before I get to that, a couple of points on your expenses: Onward. You value a property by calculating its CAP rate. This is what you're calculating, except it does NOT include interest like you did -- that's a loan to you, and has no bearing on whether the unit itself is a good investment. It also includes estimations of variable expenses like maintenance and lack of income from vacancies. People argue vociferously on exactly how much to calculate for those. Maintenance will vary by age of the building and how damaging your tenets are. Vacancies vary based on how desirable the location is, how well you've done the maintenance, and how low the rent is. Doing the math based on your numbers, with just the fixed expenses: 8400 rent - 2400 management fee - 100 insurance = 5900/year income. 5900/150000 = 0.0393 = 3.9% CAP rate. And that's not even counting the variable expenses yet! So, what's a good CAP rate? Generally, 10% CAP rate is a good deal, and higher is a great deal. Below that you have to start to get cautious. Some places are worth a lower rate, for instance when the property is new and in a good location. You can do 8% on these. Below 6% CAP rate is usually a really bad investment. So, unless you're confident you can at least double the rent right off the bat, this is a terrible deal. Another way to think about it You're looking to buy with your finances in just about the best position possible -- a huge down payment and really low interest. Plus you haven't accounted for maintenance, taxes (if any), and vacancies. And still you'd make only a measly 1.2% profit? Would you buy a bond that only pays out 1.2%? No? What about a bond that only pays 1.2%, but also from time to time can force YOU to pay into IT a much larger amount every month?", "title": "" }, { "docid": "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": "039a71f141e848c3fc83ed22020c9e98", "text": "If you feel the house will appreciate, I'd say go for it. I'm not familiar with the Denver market but real estate can be a great way to build wealth. Besides, it seems like at this point you would lose your earnest money deposit if you back out. I do agree with people here though about the potential risk. The only way to make money is if the property appreciates. In Seattle, properties have appreciated like crazy in the past 5 years. Some have even gone up by 3x or 4x of what it was before. If you are right about appreciation in your market, this could be a gold mine. With all investments, there is risk involved. If you do plan to move forward, here are some suggestions: Best of luck!", "title": "" }, { "docid": "dae84622294f488ae7fff5c11d07754a", "text": "That looks like a portfolio designed to protect against inflation, given the big international presence, the REIT presence and TIPS bonds. Not a bad strategy, but there are a few things that I'd want to look at closely before pulling the trigger.", "title": "" } ]	fiqa
c2ab327130b9423ccbfba6c234376a7b	Are there any funds tracking INDEXDJX:REIT?	[ { "docid": "c6cfd328152923cd18a400e5ea5ef1a5", "text": "Although you can't invest in an index, you can invest in a fund that basically invests in what the index is made up of. Example: In dealing with an auto index, you could find a fund that buys car companies's stock. The Google Finance list of funds dealing with INDEXDJX:REIT Although not pertaining to your quetion exactly, you may want to consider buying into Vanguard REIT ETF I hope this answers your question.", "title": "" } ]	[ { "docid": "74e5c4eb9edac1768960798a29a788c8", "text": "\"Beatrice does a good job of summarizing things. Tracking the index yourself is expensive (transaction costs) and tedious (number of transactions, keeping up with the changes, etc.) One of the points of using an index fund is to reduce your workload. Diversification is another point, though that depends on the indexes that you decide to use. That said, even with a relatively narrow index you diversify in that segment of the market. A point I'd like to add is that the management which occurs for an index fund is not exactly \"\"active.\"\" The decisions on which stocks to select are already made by the maintainers of the index. Thus, the only management that has to occur involves the trades required to mimic the index.\"", "title": "" }, { "docid": "7281e2011dcf9a28ad110b6fda9ae354", "text": "\"The majority (about 80%) of mutual funds are underperforming their underlying indexes. This is why ETFs have seen massive capital inflows compared to equity funds, which have seen significant withdrawals in the last years. I would definitively recommend going with an ETF. In addition to pure index based ETFs that (almost) track broad market indexes like the S&P 500 there are quite a few more \"\"quant\"\" oriented ETFs that even outperformed the S&P. I am long the S&P trough iShares ETFs and have dividend paying ETFs and some quant ETFS on top (Invesco Powershares) in my portfolio.\"", "title": "" }, { "docid": "13804378135ed6bfb6d6e7517aac9d40", "text": "index ETF tracks indented index (if fund manager spend all money on Premium Pokemon Trading Cards someone must cover resulting losses) Most Index ETF are passively managed. ie a computer algorithm would do automatic trades. The role of fund manager is limited. There are controls adopted by the institution that generally do allow such wide deviations, it would quickly be flagged and reported. Most financial institutions have keyman fraud insurance. fees are not higher that specified in prospectus Most countries have regulation where fees need to be reported and cannot exceed the guideline specified. at least theoretically possible to end with ETF shares that for weeks cannot be sold Yes some ETF's can be illiquid at difficult to sell. Hence its important to invest in ETF that are very liquid.", "title": "" }, { "docid": "18ba65edf360c23887d0043f4696facb", "text": "Now, if I'm not mistaken, tracking a value-weighted index is extremely easy - just buy the shares in the exact amount they are in the index and wait. Yes in theory. In practise this is difficult. Most funds that track S&P do it on sample basis. This is to maintain the fund size. Although I don't have / know the exact number ... if one wants to replicate the 500 stocks in the same %, one would need close to billion in fund size. As funds are not this large, there are various strategies adopted, including sampling of companies [i.e. don't buy all]; select a set of companies that mimic the S&P behaviour, etc. All these strategies result in tracking errors. There are algorithms to reduce this. The only time you would need to rebalance your holdings is when there is a change in the index, i.e. a company is dropped and a new one is added, right? So essentially rebalance is done to; If so, why do passive ETFs require frequent rebalancing and generally lose to their benchmark index? lets take an Index with just 3 companies, with below price. The total Market cap is 1000 The Minimum required to mimic this index is 200 or Multiples of 200. If so you are fine. More Often, funds can't be this large. For example approx 100 funds track the S&P Index. Together they hold around 8-10% of Market Cap. Few large funds like Vangaurd, etc may hold around 2%. But most of the 100+ S&P funds hold something in 0.1 to 0.5 range. So lets say a fund only has 100. To maintain same proportion it has to buy shares in fraction. But it can only buy shares in whole numbers. This would then force the fund manager to allocate out of proportion, some may remain cash, etc. As you can see below illustrative, there is a tracking error. The fund is not truly able to mimic the index. Now lets say after 1st April, the share price moved, now this would mean more tracking error if no action is taken [block 2] ... and less tracking error if one share of company B is sold and one share of company C is purchased. Again the above is a very simplified view. Tracking error computation is involved mathematics. Now that we have the basic concepts, more often funds tracking S&P; Thus they need to rebalance.", "title": "" }, { "docid": "bfb745490ac34704883d49a7836287d0", "text": "News-driven investors tend to be very short-term focussed investors. They often trade by using index futures (on the S&P 500 index for instance).", "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": "001308bb6898cc328653575ba51889b7", "text": "Not to my knowledge. Often the specific location is diversified out of the fund because each major building company or real estate company attempts to diversify risk by spreading it over multiple geographical locations. Also, buyers of these smaller portfolios will again diversify by creating a larger fund to sell to the general public. That being said, you can sometimes drill down to the specific assets held by a real estate fund. That takes a lot of work: You can also look for the issuer of the bond that the construction or real estate company issued to find out if it is region specific. Hope that helps.", "title": "" }, { "docid": "545e9e42cce983a37760a9ff4bb41ede", "text": "I tried direct indexing the S&P500 myself and it was a lot of work. Lots of buys and sells to rebalance, tons of time in spreadsheets running calculations/monitoring etc, dealing with stocks being added or removed from the index, adding money (inflows). Etc. All of the work is the main reason I stopped. I came to realize the 0.05% I pay Vanguard is a great deal.", "title": "" }, { "docid": "f364a2de6e832ec99014996a345e4136", "text": "Over the past five years, QFVOX has returned 13.67%, compared to the index fund SPY that has returned 50.39%. SEVAX has lost 23.96%. AKREX has returned 81.82%. In two of your three examples, you would have done much better in an index fund with a very low expense ratio as suggested. While one can never, as you see, make a generalization, in almost every case, most investors will do better, and often much better, with an index fund with a low expense ratio. My source was Google Finance.", "title": "" }, { "docid": "3b0513ea719821872a14f80eda6c8c71", "text": "ACWI refers to a fund that tracks the MSCI All Country World Index, which is A market capitalization weighted index designed to provide a broad measure of equity-market performance throughout the world. The MSCI ACWI is maintained by Morgan Stanley Capital International, and is comprised of stocks from both developed and emerging markets. The ex-US in the name implies exactly what it sounds; this fund probably invests in stock markets (or stock market indexes) of the countries in the index, except the US. Brd Mkt refers to a Broad Market index, which, in the US, means that the fund attempts to track the performance of a wide swath of the US stock market (wider than just the S&P 500, for example). The Dow Jones U.S. Total Stock Market Index, the Wilshire 5000 index, the Russell 2000 index, the MSCI US Broad Market Index, and the CRSP US Total Market Index are all examples of such an index. This could also refer to a fund similar to the one above in that it tracks a broad swath of the several stock markets across the world. I spoke with BNY Mellon about the rest, and they told me this: EB - Employee Benefit (a bank collective fund for ERISA qualified assets) DL - Daily Liquid (provides for daily trading of fund shares) SL - Securities Lending (fund engages in the BNY Mellon securities lending program) Non-SL - Non-Securities Lending (fund does not engage in the BNY Mellon securities lending program) I'll add more detail. EB (Employee Benefit) refers to plans that fall under the Employee Retirement Income Security Act, which are a set a laws that govern employee pensions and retirement plans. This is simply BNY Mellon's designation for funds that are offered through 401(k)'s and other retirement vehicles. As I said before, DL refers to Daily Liquidity, which means that you can buy into and sell out of the fund on a daily basis. There may be fees for this in your plan, however. SL (Securities Lending) often refers to institutional funds that loan out their long positions to investment banks or brokers so that the clients of those banks/brokerages can sell the shares short. This SeekingAlpha article has a good explanation of how this procedure works in practice for ETF's, and the procedure is identical for mutual funds: An exchange-traded fund lends out shares of its holdings to another party and charges a rental fee. Running a securities-lending program is another way for an ETF provider to wring more return out of a fund's holdings. Revenue from these programs is used to offset a fund's expenses, which allows the provider to charge a lower expense ratio and/or tighten the performance gap between an ETF and its benchmark.", "title": "" }, { "docid": "3451c2779bca4a3422a1edf0de832b52", "text": "At this time, Google Finance doesn't support historical return or dividend data, only share prices. The attributes for mutual funds such as return52 are only available as real-time data, not historical. Yahoo also does not appear to offer market return data including dividends. For example, the S&P 500 index does not account for dividends--the S&P ^SPXTR index does, but is unavailable through Yahoo Finance.", "title": "" }, { "docid": "5a2597ff9b7701bb15d381e14a0bc724", "text": "\"What does ETFs have to do with this or Amazon? Actually, investing in ETFs means you are killing actively managed Mutual Funds (managed by people, fund managers) to get an average return (and loss) of the market that a computer manage instead of a person. And the ETF will surely have Amazon stocks because they are part of the index. I only invest in actively managed mutual funds. Yes, most actively managed mutual funds can't do better than the index, but if you work a bit harder, you can find the many that do much better than the \"\"average\"\" that an index give you.\"", "title": "" }, { "docid": "3e0cc51cddecc1fe58524e39c9897ba2", "text": "It would involve manual effort, but there is just a handful of exclusions, buy the fund you want, plug into a tool like Morningstar Instant X Ray, find out your $10k position includes $567.89 of defense contractor Lockheed Martin, and sell short $567.89 of Lockheed Martin. Check you're in sync periodically (the fund or index balance may change); when you sell the fund close your shorts too.", "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": "0546c54dd914223b64e3377ed748a20b", "text": "Here's a very simple answer, ask your broker/bank. Mine uses ofx. When asked if they would reimburse me for any unauthorized activity, the answer was no. Simple enough, the banks that use it don't feel its secure enough.", "title": "" } ]	fiqa
e023a109075d508d61f4ea8d7513be6b	How do I factor dividends and yield into the performance of a security?	[ { "docid": "bfc93d42724ce523038b6fabed0ec9fc", "text": "Instead of a price chart can use a performance chart, which is usually expressed as a percentage increase from the original purchase price. To factor in the dividends, you can either add in all of your dividends to the final price, or subtract the accumulated dividends from your cost basis (the initial price).", "title": "" }, { "docid": "fdb6ac862a66bbb445259d15855dd771", "text": "Usually I've seen people treat the dividend like a separate cash flow, which is discounted if the company doesn't have a well-established dividend history. I've never really seen dividends rolled into a total return chart (except in the context of an article), probably because dividend reinvestment is a nightmare of record-keeping in a taxable account, and most folks don't do it. One of my brokers (TD Ameritrade) does allow you to plot dividend yield historically on their charts.", "title": "" }, { "docid": "dda0fb223ab5a85f71808cc1cc96cd93", "text": "\"Good observation. In fact, the S&P index itself is guilty of not including dividends. So when you look at the index alone, the delta between any two points in time diverges, and the 20 return observed if one fails to include dividends is meaningless, in my my humble opinion. Yahoo finance will let you look at a stock ticker and offer you an \"\"adjusted close\"\" to include the dividend effect.\"", "title": "" } ]	[ { "docid": "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": "20b29763e065272d5f4da2550a982ceb", "text": "Say you buy a bond that currently costs $950, and matures in one year, at $1000 face value. It has one coupon ($50 interest payment) left. The coupon, $50, is 50/950 or 5.26%, but you get the face value, $1000, for an additional $50 return. This is why the yield to maturity is higher than current yield. If the maturity were in two years, the coupons still provide 5.26%, and the extra 1000/950 is another 5.26% over 2 years, or (approx) 2.6%/yr compounded, for a total YTM of 7.86%. This is a back-of envelope calculation, the real way to calculate is with a finance calculator. Entering PV (present value) FV (future value) PMT (coupon payment(s)) and N (number of periods). With no calculator or spreadsheet, my estimate will be pretty close.", "title": "" }, { "docid": "4a03c953af7e493438d0b7e0261d42eb", "text": "\"Everything you are doing is fine. Here are a few practical notes in performing this analysis: Find all the primary filing information on EDGAR. For NYSE:MEI, you can use https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000065270&type=10-K&dateb=&owner=exclude&count=40 This is the original 10-K. To evaluate earnings growth you need per share earnings for the past three years and 10,11,12 years ago. You do NOT need diluted earnings (because in the long term share dilution comes out anyway, just like \"\"normalized\"\" earnings). The formula is avg(Y_-1+Y_-2+Y_-3) / is avg(Y_-10+Y_-11+Y_-12) Be careful with the pricing rules you are using, the asset one gets complicated. I recommend NOT using the pricing rules #6 and #7 to select the stock. Instead you can use them to set a maximum price for the stock and then you can compare the current price to your maximum price. I am also working to understand these rules and have cited Graham's rules into a checklist and worksheet to find all companies that meet his criteria. Basically my goal is to bottom feed the deals that Warren Buffett is not interested in. If you are interested to invest time into this project, please see https://docs.google.com/document/d/1vuFmoJDktMYtS64od2HUTV9I351AxvhyjAaC0N3TXrA\"", "title": "" }, { "docid": "e11a156276e3268bd1b63620fce86a21", "text": "When you sell the stock your income is from the difference of prices between when you bought the stock and when you sold it. There's no interest there. The interest is in two places: the underlying company assets (which you own, whether you want it or not), and in the distribution of the income to the owners (the dividends). You can calculate which portion of the interest income constitutes your dividend by allocating the portions of your dividend in the proportions of the company income. That would (very roughly and unreliably, of course) give you an estimate what portion of your dividend income derives from the interest. Underlying assets include all the profits of the company that haven't been distributed through dividends, but rather reinvested back into the business. These may or may not be reflected in the market price of the company. Bottom line is that there's no direct correlation between the income from the sale of the stake of ownership and the company income from interest, if any correlation at all exists. Why would you care about interest income of Salesforce? Its not a bank or a lender, they may have some interest income, but that's definitely not the main income source of the company. If you want to know how much interest income exactly the company had, you'll have to dig deep inside the quarterly and annual reports, and even then I'm not sure if you'll find it as a separate item for a company that's not in the lending business.", "title": "" }, { "docid": "759e601171450b86a2054b66acd393e7", "text": "\"I will add another point to ChrisinEdmonton's answer... I recognize that this is perhaps appropriate as a comment--or maybe 1/2 of an answer, but the comment formatting is inadequate for what I want to say. The magic formula that you need to understand is this: (Capital Invested) * (Rate of Return) = (Income per Period) When ChrisinEdmonton says that you need $300,000, he is doing some basic algebra... (Capital Required) = (Income per Period) / (Rate of Return) So if you're looking at $12,000 per year in passive income as a goal, and you can find a \"\"safe\"\" 4% yield, then what ChrisinEdmonton did is: $12,000 / 0.04 = $300,000 You can use this to play around with different rates of return and see what investment options you can find to purchase. Investment categories like REITs will risk your principal a little more, but have some of the highest dividend yields of around 8%--12%. You would need $100,000--$150,000 at those yields. Some of the safest approaches would be bonds or industrial stocks that pay dividends. Bonds exist around 3%--4%, and industrial dividend stocks (think GE or UTX or Coca Cola) tend to pay more like 2%-3%. The key point I'm trying to make is that if you're looking for this type of passive income, I recommend that you don't plan on the income coming from gains to the investment... This was something that ChrisinEdmonton wasn't entirely clear about. It can be complicated and expensive to whittle away at a portfolio and spend it along the way.\"", "title": "" }, { "docid": "ae8f67bfd285b1254b3005ffff7b1f00", "text": "It looks like you need a lot more education on the subject. I suggest you pick up a book on investing and portfolio management to get a first idea. Dividend yields are currently way below 5% on blue chips. Unlike coupons from fixed income instruments (which, in the same risk category, pay a lot less), dividend yields are not guaranteed and neither is the invested principal amount. In either case, your calculation is far away from reality. Sure, there are investments (such as the mentioned direct investments in companies or housings in emerging economies) that can potentially earn you two digit percentage returns. Just remember: risk always goes both ways. A higher earning potential means higher loss potential. Also, a direct investment is a lot less liquid than an investment on a publicly quoted high turnover market place. If you suddenly need money, you really don't want to be pressed to sell real estate in an emerging market (keyword: bid ask spread). My advice: the money that you can set aside for the long term (10 years plus), invest it in stock ETFs, globally. Everything else should be invested in bond funds or even deposits, depending on when you will need the access. As others have pointed out, consider getting professional advice.", "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": "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": "0ccdc6551bab3d553a85e58f297e935e", "text": "A share is more than something that yields dividends, it is part ownership of the company and all of its assets. If the company were to be liquidated immediately the shareholders would get (a proportion of) the net value (assets - liabilities) of the company because they own it. If a firm is doing well then its assets are increasing (i.e. more cash assets from profits) therefore the value of the underlying company has risen and the intrinsic value of the shares has also increased. The price will not reflect the current value of the firms assets and liabilities because it will also include the net present value of expected future flows. Working out the expected future flows is a science on par with palmistry and reading chicken entrails so don't expect to work out why a company is trading at a price so much higher than current assets - liabilities (or so much lower in companies that are expected to fail). This speculation is in addition to price speculation that you mention in the question.", "title": "" }, { "docid": "35ec6ed1d2beb27b9ab3d584c9de8470", "text": "Dividend yield is a tough thing to track because it's a moving target. Dividends are paid periodically the yield is calculated based on the stock price when the dividend is declared (usually, though some services may update this more frequently). I like to calculate my own dividend by annualizing the dividend payment divided by my cost basis per share. As an example, say you have shares in X, Co. X issues a quarterly dividend of $1 per share and the share price is $100; coincidentally this is the price at which you purchased your shares. But a few years goes by and now X issues it's quarterly dividend of $1.50 per share, and the share price is $160. However your shares only cost you $100. Your annual yield on X is 6%, not the published 3.75%. All of this is to say that looking back on dividend yields is somewhat similar to nailing jello to the wall. Do you look at actual dividends paid through the year divided by share price? Do you look at the annualized dividend at the time of issue then average those? The stock price will fluctuate, that will change the yield; depending on where you bought your stock, your actual yield will vary from the published amount as well.", "title": "" }, { "docid": "ee5ebb3166c476aae0783c775c317dc4", "text": "Having a good dividend yield doesn't guarantee that a stock is safe. In the future, the company may run into financial trouble, stop paying dividends, or even go bankrupt. For this reason, you should never buy a stock just because it has a high dividend yield. You also need some criteria to determine whether that stock is safe to buy. Personally, I consider a stock is reasonably safe if it meets the following criteria:", "title": "" }, { "docid": "aa908a8d6e858642e3071789fcc63f55", "text": "This is a great question for understanding how futures work, first let's start with your assumptions The most interesting thing here is that neither of these things really matters for the price of the futures. This may seem odd as a futures contract sounds like you are betting on the future price of the index, but remember that the current price already includes the expectations of future earnings as well! There is actually a fairly simple formula for the price of a futures contract (note the link is for forward contracts which are very similar but slightly more simple to understand). Note, that if you are given the current price of the underlying the futures price depends essentially only on the interest rate and the dividends paid during the length of the futures contract. In this case the dividend rate for the S&P500 is higher than the prevailing interest rate so the futures price is lower than the current price. It is slightly more complicated than this as you can see from the formula, but that is essentially how it works. Note, this is why people use futures contracts to mimic other exposures. As the price of the future moves (pretty much) in lockstep with the underlying and sometimes using futures to hedge exposures can be cheaper than buying etfs or using swaps. Edit: Example of the effect of dividends on futures prices For simplicity, let's imagine we are looking at a futures position on a stock that has only one dividend (D) in the near term and that this dividend happens to be scheduled for the day before the futures' delivery date. To make it even more simple lets say the price of the stock is fairly constant around a price P and interest rates are near zero. After the dividend, we would expect the price of the stock to be P' ~ P - D as if you buy the stock after the dividend you wouldn't get that dividend but you still expect to get the rest of the value from additional future cash flows of the company. However, if we buy the futures contract we will eventually own the stock but only after the dividend happens. Since we don't get that dividend cash that the owners of the stock will get we certainly wouldn't want to pay as much as we would pay for the stock (P). We should instead pay about P' the (expected) value of owning the stock after that date. So, in the end, we expect the stock price in the future (P') to be the futures' price today (P') and that should make us feel a lot more comfortable about what we our buying. Neither owning the stock or future is really necessarily favorable in the end you are just buying slightly different future expected cash flows and should expect to pay slightly different prices.", "title": "" }, { "docid": "1b69eea97ab6432c7cde802d6fd58942", "text": "Dividend yield is not the only criteria for stock selection. Companies past performance, management, past deals, future expansion plans, and debt equity ratio should be considered. I would also like to suggest you that one should avoid making any investment in the companies that are directly affected by frequent changes in regulations released by government. All the above mentioned criteria are important for your decision as they make an impact on your investment and can highly affect the profits.", "title": "" }, { "docid": "ccc65bbb1614f209f9f526eccf3e7119", "text": "\"The term you're looking for is yield (though it's defined the other way around from your \"\"payout efficiency\"\", as dividend / share price, which makes no substantive difference). You're simply saying that you want to buy high-yield shares, which is a common investment strategy. But you have to consider that often a high-yielding share has a reason for the high yield. You probably don't want to buy shares in a company whose current yield is 10% but will go into liquidation next year.\"", "title": "" }, { "docid": "c4f7c8ce1fa7c6b9b2e7b2b7670828a4", "text": "\"To try and address your 'how' it goes a bit like this. You need to first assess how your stuff is invested, if for example half is in stocks, and the other half is in bonds, then you will need to calculate a 'blended' rate for what are reasonable 'average return' for both. That might mean looking at the S&P500 or Russell 3000 for the stock portion, and some bond index for that portion, then 'blend the rates', in this case using a formula like this then compare the blended rate with the return in your IRA. It is generally a lot more useful to compare the various components of your total return separately, especially if you investing with a particular style such as 'agressive growth' or you are buying actual bonds and not a bond fund since most of the bond oriented indexes are for bond funds, which you can't really compare well with buying and holding bonds to maturity. Lets say your stock side was two mutual funds with different styles, one 'large cap' the other 'aggressive growth'. In that case you might want to compare each one of those funds with an appropriate index such as those provided by Morningstar If you find one of them is consistently below the average, you might want to consider finding an alternative fund who's manager has a better track record (bearing in mind that \"\"past performance....\"\") For me (maybe someone has a good suggestion here) bonds are the hard thing to judge. The normal goal of actually owning bonds (as opposed to a fund) is to retain the entire principal value because there's no principal fluctuation if you hold the bond to maturity (as long as you choose well and the issuer doesn't default) The actual value 'right now' of a bond (as in selling before maturity) and bond funds, goes up and down in an inverse relationship with interest rates. That means the indexes for such things also go up and down a lot, so it's very hard to compare them to a bond you intend to hold to maturity. Also, for such a bond, there's not a lot of point to 'switch out' unless you are worried about the issuer defaulting. If rates are up from what you are getting on your bonds, then you'll have to sell your bond at a discount, and all that happens is you'll end up holding a different bond that is worth less, but has higher interest (basically the net return is likely to be pretty much the same). The better approach there is generally to 'ladder' your maturity dates so you get opportunities to reinvest at whatever the prevailing rates are, without having to sell at a discount.. anyway the point is that I'm not sure there's a lot of value to comparing return on the bond portion of an IRA unless it's invested in bond funds (which a lot of people wanting to preserve principal tend to avoid)\"", "title": "" } ]	fiqa
715862bb148cbcd9481f62d17c04b523	How much in cash equivalents should I keep in the bank? [duplicate]	[ { "docid": "50173844fb57e98476d364d2b3cd170e", "text": "In personal finance circles this is called an Emergency Fund. There are many opinions about how big it needs to be but most seem to come in around 3-6 months worth of your average expenses. Any more than that and you're going to loose money to inflation, less and you will start having problems if you get laid off or have a medical issue.", "title": "" } ]	[ { "docid": "330bf78226ad31ceed4dba2a3dbe9b5e", "text": "\"It's also worth thinking about minor \"\"emergencies\"\" when the location of your cash may be more important than the amount. I keep a baggie of change and small bills in my glovebox for meters and tolls. I keep a ten dollar bill in my armband when I go out for a jog or bike. Those little stashes have saved me more than once. Zombie apocalypse money? I just have a couple hundred at home.\"", "title": "" }, { "docid": "19d3ffbf25f029a62e64a1f8ee210b01", "text": "Money laundering alarms would definitely be raised, way before you walking in with the cash to deposit. Every cash transaction over $10K will be reported by the bank (and not only banks have to report), so the report will be sent when you withdraw the money, as well. But if the money is legitimately yours and you can show the sources, then you shouldn't be worried. There's no law against having cash. Its just very hard to track down the cash money sources, and if someone asks you and you cannot show the proofs - the problem would definitely be yours.", "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": "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": "2a8aa234932951e462e9c75416d5fab0", "text": "If you want to keep any consistent standard, you need to knuckle down and make those transaction entries. Honestly, this is a lot faster doing in bulk than doing day-by-day. But change how you account so it isn't annoying. I minimize my bookable transactions. For instance I deposit all income whole (for tracking) but stop tracking when the money is converted to cash or gift card money - I log adding $50 to a McDonalds gift card, but not the individual meals. I only use cash for the myriad small things I do not want to track - fast food, parking meters, etc. Anything big or that I want to track goes on a credit card. Then it's easy to reconcile credit cards to accounting system. (Cathy) Ryan's Law: if it wasn't written down, it didn't happen.", "title": "" }, { "docid": "524cddb28590d076ce9cdaf36faf147c", "text": "So ... how are you going to have a bank run if you got rid of cash? I suspect big investors will attempt (have already attempted?) to pull their cash, but regular people? Not like running to the ATM will do much good and I don't think they have offshore accounts. Excuse my naïveté, but that's the first thing that came to my mind...", "title": "" }, { "docid": "fbe2d50f620b608ba7aeb2a435476890", "text": "You're saying that you're thinking of keeping 35% in cash? If you expect the market to plummet in the next few months and then head up again, this would be a smart strategy. Hold on to a bunch of cash, then when the market hits bottom buy, then as it goes back up collect your profits. In practice, the long-term trend of the market has been up for as long as there has been a stock market. Bear markets tend to be relatively short, usually just a few months or at most a year or two before the market gets back to where it was. If you are smart enough to predict when there will be a decline and how long it will last, you're smarter than 99% of the professionals, never mind the amateurs. Personally, I keep only trivial amounts of cash. Let's see, right now about 2% of my assets. If you're more active in managing your retirement accounts -- if you really watch the market on a monthly basis or more frequently and adjust your assets according -- it would make sense to keep a larger cash reserve and use it when the market goes down. But for the average person, I think it would be a big mistake to keep anywhere near 35% of your assets in cash. In the long run, you'll probably lose out on a lot of potential growth.", "title": "" }, { "docid": "340ac483e5d9cf583bfacf6ff5df17ad", "text": "Everyone would like a savings/checking account that has the same liquidity as others but pays multiple times as much, but such a thing would break the laws of finance. The thing keeping savings and checking accounts cheap isn't particularly the FDIC insurance but the high liquidity and near certainty that you will not lose money. In all of finance you are compensated for the risk (and perhaps illiquidity) you bear. If you insist on a risk-free and highly liquid investment, you will get the risk-free and highly liquid rate, which is currently around 1%. Doesn't matter what type of investment it is (savings, money market, treasuries, etc.). Money market funds, in particular, were designed to be a replacement for savings accounts. They have decent liquidity and almost no risk (and no FDIC insurance). But they earn about what good savings accounts do, because that's what risk-free investments earn. If you wish to earn more you must decide what you will give up: Decide on one (or both) of those to sacrifice and you will find yourself with options.", "title": "" }, { "docid": "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": "7730e24ba7b99012fc2c2ab898a85097", "text": "\"While I certainly agree with the principle of paying down debt, there is some value in having a healthy cash cushion. If an emergency expense were to come up, and your credit has been cut-off or reduced to the point where you have no excess credit, then having real cash on hand is critical. I would perform the following thought-experiment: What if my available credit had been cut off? How much would I need in cash to survive for 1 month, 3 months, 5 months, etc.? Consider what time period you'd be comfortable with, and set that amount as your minimum desired cash on hand. While it may seem extreme to not have access to credit at all, during the credit crisis many banks and lenders \"\"tightened\"\" their lending: reducing credit limits, closing lines of credit, calling loans, raising rates, etc. Suze Orman recommends cash savings equivalent to 8 months living expenses. That doesn't mean 8 months salary, but 8 months of what it would take to live on. At one point, in the midst of the economic crisis, I thought that made sense. The Simple Dollar blog considers Suze's recommendation and the idea of emergency fund vs. debt repayment. Worth reading: Is Suze Right? Do Emergency Funds Now Trump Debt Repayment?.\"", "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": "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": "7fee077f6b624e20dc496e2b01ac076e", "text": "If inflation is at 2% per annum, in a year you would need £102 to buy equivalent goods to what you could buy today. So if you keep your money in a drawer the buying power of your £100 in a year will be only 100/102 = 98.039% of what it is currently.", "title": "" }, { "docid": "41b6f7f8119d1318ecf780bd75d8542a", "text": "In today's market being paid 1% for risk and free access money is pretty darn good. If 50k is what you feel comfortable with an emergency fund, then you are doing a fine enough job. To me that is a lot to keep in an emergency fund, however several factors play into this: We both drive older cars, so I also keep enough money around to replace one of them. Considering all that I keep a specific amount in savings that for me earns .89%. Some of that is kept in our checking accounts which earns nothing. You have to go through some analysis of your own situation and keep that amount where it is. If that amount is less than 50K, you have some money to play with. Here are some options:", "title": "" }, { "docid": "90a56315d20bf81e78a7647eb7bea497", "text": "While on a completely different scale to what you boys are talking about couple of years ago I was a relationship manager in retail banking and would on the reg have to sign away ~400k out of the tellers boxes and into the safe. After a few months of that you kind of view it as lego to fuck around with... [Australian money](https://www.google.com.au/search?q=australian+money&hl=en&prmd=imvns&source=lnms&tbm=isch&sa=X&ei=OquAUO2SD82ciAfSnoDgCA&ved=0CAoQ_AUoAQ&biw=1006&bih=502)", "title": "" } ]	fiqa
4a55e555c0256da95190132baae60654	Can future rental income be applied to present debt-to-income ratio when applying for second mortgage?	[ { "docid": "a07291b4de8087c2421bb4e70ecf6573", "text": "They will include the rental income into the calculation. They don't give you a 100% credit for the income because they have to factor that you might have a gap between tenants. Years ago they only credited me with 66% of the expected monthly income. Example: This expense was then supposed to come from the 10% of my income that was allocated for monthly non-principal mortgage loans, e.g student loan, auto loan, credit card debt...", "title": "" }, { "docid": "aa55d2a06f07727f5c894fe98b1271e6", "text": "Having both purchased income properties and converted prior residences into rental properties I have found that it is difficult to get the banks to consider the potential rental income in qualifying you for a loan. It helps if you have prior rental experience but in many cases you will have to qualify outright (i.e. without consideration of the potential income). The early 2000s were great for responsible borrows/investors but today's regulations make it much more difficult to finance income property.", "title": "" }, { "docid": "86ef9962360668eba7a9c6caf07a7265", "text": "Generally speaking, no they won't. In this case, though I haven't done it myself, I was recommended to put the mortgage on the real estate after it's been leased out and has a contract on it. Then, yes, they will use it for that. But, ex-ante don't expect any bank to count on income from it because, at that point, there's zero guarantee you'll get it leased, and even if you do, at what rate.", "title": "" } ]	[ { "docid": "50f8deed2522263fddbfeed7c4d1f20d", "text": "Two principles in comparing different scenarios: 1) keep the two scenarios as equal as possible in amount and timing of payments; and 2) find the financial comparison at one particular point. So, your car loan, $10,000 for 35 months at 8% compounded monthly means you're paying $321.29 Suppose you make the switch and keep on paying the same, mortgage and $321.29 for the 35 months (see 1, above) Those extra payments, continued for 35 months at your mortgage rate of 5.59%, will pay off a mortgage of $10,354.10, which will more than pay off the $10,000 you added to the mortgage In other words, making the switch will benefit you to the tune of 354.10 as of the day of the switch. You could ask the mortgage company to give you the $10,000 and the $354.10, and all your payments and amortization would stay the same... (see 2 above) Of course, this is pretty much what Joe Taxpayer said...", "title": "" }, { "docid": "18709a398b2b7066a205463a07181a42", "text": "There's a couple issues to consider: When you sell your primary home, the IRS gives you a $500k exemption (married, filing jointly) on gain. If you decide not to sell your current house now, and you subsequently fall outside the ownership/use tests, then you may owe taxes on any gains when you sell the house. Rather than being concerned about your net debt, you should be concerned about your monthly debt payments. Generally speaking, you cannot have debt payments of more than 36% of your monthly income. If you can secure a renter for your current property, then you may be able to reach this ratio for your next (third) property. Also, only 75% of your expected monthly rental income is considered for calculating your 36% number. (This is not an exhaustive list of risks you expose yourself to). The largest risk is if you or your spouse find yourself without income (e.g. lost job, accident/injury, no renter), then you may be hurting to make your monthly debt payments. You will need to be confident that you can pay all your debts. A good rule that I hear is having the ability to pay 6 months worth of debt. This may not necessarily mean having 6 months worth of cash on hand, but access to that money through personal lines of credit, borrowing against assets, selling stocks/investments, etc. You also want to make sure that your insurance policies fully cover you in the event that a tenant sues you, damages property, etc. You also don't want to face a situation where you are sued because of discrimination. Hiring a property management company to take care of these things may be a good peace-of-mind.", "title": "" }, { "docid": "18a4acfd33c5b0a9aca4a2a2e35d466f", "text": "The issue here is that the transaction (your funds to her account) looks very similar to the rent payments which you plan to make in the future. Those rental payments (if deemed to be commercial) would normally be subject to tax. Consider the scenario where rather than an up front $5000, and $5000 over 2 years, you paid her $10000, and paid no rent. That might be an attempt to avoid paying tax. A commercial transaction can't be re-labeled as a gift just based on your election - the transaction needs to be considered as a whole. However, an interest free, unsecured loan connected with you paying rent at market rate would be (depending on local laws) simply foolish (to some extent). I don't think you are able to structure the transaction as a joint purchase (since the mortgage will prevent her from allocating a part of the property to you). Its also likely that you can live in her house and contribute an adequate amount to the household costs without creating a taxable income for her. For example in the UK, up to ~£4000 pa rental income generated from the property in which you reside does not need to be declared. You need to identify the scenarios where your particular arrangement could be imagined as resulting in a taxable or potentially taxable event - then make sure you are not avoiding those events just by choosing how you label the events.", "title": "" }, { "docid": "15c158701768c423b56c2ce8adef5483", "text": "I also am paying roughly twice as much in rent as a mortgage payment would be on the type of house I have been looking at, so I'd really like to purchase a house if possible. Sounds like I need to rain on your parade a bit: there's a lot more to owning a house than the mortgage. Property tax, insurance, PMI, and maintenance are things that throw this off. You'll also be paying more interest than normal given your recent credit history. It's still possible that buying is better than renting, but one really should run the detailed math on this. For example, looking at houses around where I live, insurance, property tax and special assessments over the course of a year roughly equal the mortgage payments annually. You probably won't be able to get a loan just yet. If you've just started your new job it will take a while to build a documentable income history sufficient for lenders. But take heart! As you take the next year to save up a down payment / build up an emergency fund you'll discover that credit score improves with time. However, it's crucial that you don't do anything to mess with the score. Pay all your bills on time. Don't take out a car loan. Don't close your old revolving accounts. But most of all, don't worry. Rent hurts (I rent too) but in many parts of the US owning hurts more, as your property values fall. A house down the street from my dear old mother has been on the market for several months at a price 33 percent lower than her most recent appraisals. I'm comfortable waiting until markets stabilize / start rising before jumping on real estate.", "title": "" }, { "docid": "2cd417b896d953ed5d5f667607a01b85", "text": "There is no issue - and no question - if you get married. The question is only relevant in the event that you go separate ways. Should that happen, you imply that you would want to refund whatever amount your girlfriend has paid toward the mortgage. The solution, then, would seem to be to exempt her from any payments, as you will either give that money back to her (if you break up) or make her a co-owner of the condo (if you get married). If you actually need her contributions to the monthly nut, you could give her a written agreement whereby you would refund her money (plus interest) at her discretion.", "title": "" }, { "docid": "34d633282f0e3a21679c224f05219a83", "text": "Utilization is near real-time. What that means is that what is reported is what is taken in terms of debt-to-income (DTI) ratios. When a mortgage broker pulls your credit, they will pull the latest balances with the minimum payments. This is what is taken to determine DTI along with your gross monthly income. If you do not pay your account in full before the statement date, then you more than likely will have to wait an additional statement cycle before it reports to the credit bureaus. Therefore, your utilization is dynamic and the history of your utilization month-to-month is not recorded forever. Only the current balance. What is maintained and reported is your payment history. So you want to never be late if you want to be approved anytime soon for a mortgage. A lower DTI will not help your interest rate. As long as you stay away from the maximum DTI for the mortgage vehicle you are attempting to be approved for (VA, FHA, Conventional, etc), then your DTI should not be a concern. If you are borderline at the time of underwriting, you can take the opportunity and pay off the balances. The mortgage company can then do what is called a credit supplement which entails contacting those lenders where you have proven you have a zero balance and manually input the zero balance cards, that have not yet reported to the bureaus, in your final application to the mortgage company for underwriting approval.", "title": "" }, { "docid": "7da7f4bfd86810b55a4c938eb892ef0a", "text": "As pointed out in a comment, it would be more natural to get a regular mortgage on the second house, which is essentially using the second house as collateral for its own loan. If you are to use the first house, either mortgage it or get a home equity line of credit on it and use that money to buy the second house. The relative merits of the options may depend in part on where you live, whether or not you live in the homes, and the relative cost of the two properties. For example, in the US, first and second homes get preferred tax treatment in addition to rates that are typically better than commercial loans (including mortgages for investment properties). If you're going to get a better rate and pay less taxes on one option and not on the others, that's definitely something to weigh.", "title": "" }, { "docid": "7ce55e9bf0dbb378da0165acec00aef8", "text": "It's not typically possible for someone to jointly own the house, who is not also jointly liable for the mortgage. This doesn't matter however, because it is possible for two people to get a mortgage together, where only one person's income is assessed by the lender. If that person could get a mortgage of that amount on their own, then the couple should also be able to get the same mortgage. Source: My wife and I got a mortgage like this. She is self-employed, rather than meet the very high requirements for proving her self-employment income, we simply said that we only wanted my income to be taken into consideration.", "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": "5069019873055d17bce6fac7e64c7c24", "text": "You could use the money to buy a couple of other (smaller) properties. Part of the rent of these properties would be used to cover the mortgage and the rest is income.", "title": "" }, { "docid": "254c020807418d441f950c780a5fdfb7", "text": "The loan agent surely knows that having a combination of loans greater than the value of the property (less some margin) is illegal, but also impossible. Your first mortgage, mechanic's liens, tax liens, and so forth are a matter of public record. In most states the records can be viewed online, by anyone, for free. The title search prerequisite for getting the second mortgage looks beyond the low hanging fruit for things like aborigines claims for parcels of land that include your property. The loan agent is trying to sell you a home equity line of credit. Almost everyone gets one after building up some equity. There's often no closing cost and it's not necessary to ever use it. Keep it for emergencies.", "title": "" }, { "docid": "f9b1bf923509f92cd18fa79c4a176dc8", "text": "There are several things that are missing from your estimate: The terms for the mortgage for a rental property will be different. You may be required to have a larger down payment. When approving you for the mortgage they will not count all the rental income as income, they will assume periodic vacancies. This difference may impact other credit you will be getting in the near future.", "title": "" }, { "docid": "8458e6ebcc66911b291d37d15bc50a86", "text": "To start, I hope you are aware that the properties' basis gets stepped up to market value on inheritance. The new basis is the start for the depreciation that must be applied each year after being placed in service as rental units. This is not optional. Upon selling the units, depreciation is recaptured whether it's taken each year or not. There is no rule of thumb for such matters. Some owners would simply collect the rent, keep a reserve for expenses or empty units, and pocket the difference. Others would refinance to take cash out and leverage to buy more property. The banker is not your friend, by the way. He is a salesman looking to get his cut. The market has had a good recent run, doubling from its lows. Right now, I'm not rushing to prepay my 3.5% mortgage sooner than it's due, nor am I looking to pull out $500K to throw into the market. Your proposal may very well work if the market sees a return higher than the mortgage rate. On the flip side I'm compelled to ask - if the market drops 40% right after you buy in, will you lose sleep? And a fellow poster (@littleadv) is whispering to me - ask a pro if the tax on a rental mortgage is still deductible when used for other purposes, e.g. a stock purchase unrelated to the properties. Last, there are those who suggest that if you want to keep investing in real estate, leverage is fine as long as the numbers work. From the scenario you described, you plan to leverage into an already pretty high (in terms of PE10) and simply magnifying your risk.", "title": "" }, { "docid": "b0583fd50b3c20ae13a401c553cac3d1", "text": "\"The Solicitor involved up front should be able to place constrictions as your suggesting. I think you should look carefully at the desired wording. You deserve a return on your £100k. Say, the day after you buy (this is hypothetical, please bear with me) a developer says he needs the property and will give you £460k. Your wording here says you get £100k, and then, after the mortgage split £230k, but it seems more reasonable that your deposit doubles to £200k, the remaining £260k pays the mortgage, and the £130k left is split, £65k each. My method accounts for the value of your £100k. Some would ask, why not apply the mortgage rate to that deposit? Because the home value may grow at a different rate. In my opinion, it's fair to apply the home value growth to the £100k deposit. \"\"Fair\"\" means different things to different people. This is my opinion, and a suggestion. Consider it, and do what you and your partner wish. Use a solicitor. Put it in writing.\"", "title": "" }, { "docid": "9d9403bb9d1a39b292f8692b5bc67126", "text": "\"Have you been rejected from a rental for a specific reason (leading to this question)? Landlords are in the business of exchanging space for regular payments with no drama. Anything they ask in an application should be something to minimize the risk of drama. The \"\"happy path\"\" optimistic goal is that you pay your rent by the due date every month. If your income is not sufficient for this, demonstrating you have assets and would be able to pay for the full term of the lease is part of the decision to enter into the lease with you. In the non-happy-path, say you fall off the face of the earth before ending the lease. The landlord could be owed several months of rent, and could pursue a legal judgment on your assets. With a court order, they can make the bank pay out what is owed; having bank information reduces the landlord's cost and research efforts in the event the story has degenerated to this point (in the jargon of landlording, this means the tenant is \"\"collectable\"\"). While of course you could have zeroed out your accounts or moved money to a bank you didn't tell the landlord in the meantime, if you are not the bad actor in this story, you probably wouldn't have. If you get any kind of \"\"spidey-sense\"\" about a landlord or property at all there is probably a better rental situation in your city. You also want to minimize drama. If the landlord is operating like a business, they're not in this to perform identity theft. If the landlord is sloppy, or has sloppy office workers, that would be different. In the event sharing your asset information truly bothers you, and the money is for rental expense anyway, you could offer to negotiate a 1 year prepaid rental (of course knock another 5%-10% off for time value of money and lower risk to landlord) if you're sure you wouldn't want to leave early.\"", "title": "" } ]	fiqa
890eebdfd6028a0a6f199149b13239b1	How can I compare having accounts at various banks without opening an account?	[ { "docid": "1f29a91f8306aa4d1ac166445ac5fc43", "text": "\"I think that your best option is to use the internet to look for sites comparing the various features of accounts, and especially forums that are more focused on discussion as you can ask about specific banks and people who have those accounts can answer. \"\"Requests for specific service provider recommendations\"\" are off-topic here, so I won't go into making any of my own bank recommendations, but there are many blogs and forums out there focusing on personal finance.\"", "title": "" } ]	[ { "docid": "5b770fe5e597b3e19d2a254d0222386c", "text": "Not for normal banking. You can open as many accounts as you want. I did this recently with some Amazon gift card churning for a Chase cash bonus. Staying a long time may have their credit department reach out and offer you a long time customer discount. But no one is saying you have to close one account to open another.", "title": "" }, { "docid": "d17c12d9c0392b1881adaa68bbdca8ea", "text": "Banks make mistakes. Reconciling your account with your bank statement is the way to catch the errors.", "title": "" }, { "docid": "3c54dcdac9e5d57edf63d08c1e0974ea", "text": "There are several major US banks including Bank of America, citi and Banco Popular that will open an account for people without a SSN. Most will require an in branch visit to open the account. As some one else mentioned American Express will open accounts in other countries based on an existing relationship or at least they used to.", "title": "" }, { "docid": "1cccac97e25661617c9556596aa59e69", "text": "\"With a \"\"normal\"\" CD you can't, but some banks do seem to offer CDs where you can. For instance the \"\"variable-rate CD\"\" at USAA allows ongoing deposits. I also found a United Bank \"\"saver CD\"\" which requires you to set up automatic monthly deposits. You would have to check each individual bank's CD offerings to see if they have such a product. However, if you make ongoing deposits to it, a CD becomes less distinguishable from a savings account. Even if a given bank does offer a \"\"depositable\"\" CD, you might conceivably be able to find a higher rate on a plain savings account at another bank (especially an online bank offering high savings account rates). For instance, the USAA CD I mentioned above has an APY of 0.46%, but the high yield savings accounts on this NerdWallet list have higher APYs than that. So even if you can find the kind of CD you describe, it might be better to just use a savings account anyway.\"", "title": "" }, { "docid": "4394a2c91e54e5b0bbeed65534181b3f", "text": "I recommend a Capital One 360 account. Personal experience, I'm a current undergraduate and while Capital One ATMs are everywhere and while account fees do not exist while I work, my normal Capital One bank account would be shut down, every time, over the summer. Why? Because I didn't work over the summer and I couldn't keep the minimum balance in my account. With a 360 account, I don't have to worry about paper working being mailed home when I need it at my dorm (or vice versa) and I don't have to worry about minimum balance fees closing my account (it doesn't screw my credit when that happens, but I have to open up a NEW account; frustrating). The advantages of a 360 account is that it's all online, there are no minimum balance requirements, and that I can easily access it online and even deposit checks with the Capital One app.", "title": "" }, { "docid": "394bb6647586be1013b72bbe7b8f1858", "text": "Wells Fargo. They have an account called PMA, an umbrella account for checking, savings, mortgage, and brokerage accounts. It would cost $30/month, but I never had to pay because I have a rollover retirement account that is enough to waive the fees. They count all accounts, including mortgage, which I used to have. Oh, and no restrictions. An added advantage is there are no fees for any of the accounts, nor for some other things, like bank checks, outside ATM fees, etc. I'm in California, so I don't know if the same deal exists in other states. But if you qualify for the free account, it's pretty good. Actually, most of my investments are Vanguard funds. And I have another rollover account with Vanguard, and never pay fees, but I only buy or sell from one Vanguard fund to another, and rarely since I have targeted retirement funds that are designed to be no maintenance. For some reason, I trust Vanguard more than most other funds; maybe because I like their philosophy on low-cost funds, which they started but are now getting more popular.", "title": "" }, { "docid": "c92aca1f7227e4c3bc1b62c167806fc1", "text": "\"No, this is not true. All of these banks are subject to audits by one of the four largest accounting firms in the country. These firms are worth billions of dollars. They would not risk their reputation opining on the validity of financial statements of companies that are \"\"allowed to keep two sets of books.\"\"\"", "title": "" }, { "docid": "e24bf7a39a85a27540fd6df3267e7eb0", "text": "\"Excellent question. I'm not aware of one. I was going to say \"\"go visit some personal finance blogs\"\" but then I remembered that I write on one, and that I often get a commission if I talk about online accounts, so unless something is really bad I'm not going to post on it because I want to make money, not chase it away. This isn't to say that I'm biased by commissions, but among a bunch of online banks paying pretty much the same (crappy) interest rate and giving pretty much the same (often not crappy) service, I'm going to give air time to the ones that pay the best commissions. That, and some of the affiliate programs would kick me out if I trashed them on my blog. This also would taint any site, blog or not, that does not explicitly say that they do not have affiliate relationships with the banks they review. I suppose if you read enough blogs you can figure out the bad ones by their absence, but that takes a lot of time. Seems like you'd do all right by doing a \"\"--bank name-- sucks\"\" Google search to dig up the dirt. That, or call up / e-mail / post on their forum any questions you have about their services before sending them your money. If they're up front, they'll answer you.\"", "title": "" }, { "docid": "3d0fe3e6e7002ef41d8402ddc82e230d", "text": "\"In practical terms, these days, a credit union IS a small \"\"savings and loan\"\" bank -- the kind of bank that used to exist before bankers started making money on everything but writing loans. They aren't always going to offer higher interest and/or cheaper loans than the bank-banks, but they're almost always going to be more pleasant to deal with since they consider the depositors and borrowers their stockholders, not just customers. There are minor legal differences (different insurance fund, for example), and you aren't necessarily eligible to open an account at a randomly-chosen credit union (depending on how they've defined the community they're serving), but they will rarely affect you as an account holder. The main downside of credit unions is that, like other small local banks, they will only have a few branches, usually within a limited geographic area. However, I've been using a credit union 200 miles away (and across two state lines on that route, one if I take a large detour) for decades now, and I've found that between bank-by-mail, bank-by-internet, ATM machines, and the \"\"branch exchange\"\" program (which lets you use branches of participating credit unions as if they were branches of your own) I really haven't felt a need to get to the branch. I did find that, due to network limitations of $50K/CU/day, drawing $200,000 worth of bank checks on a single day (when I purchased the house) required running around to four separate branch-exchange credit unions. But that's a weird situation where I was having trouble beating the actual numbers out of the real estate agents until a few days before the sale. And they may have relaxed those limitations since... though if I had to do it again, I'd consider taking a scenic drive to hit an actual branch of my own credit union. If you have the opportunity to join a credit union, I recommend doing so. Even if you don't wind up using it for your \"\"main\"\" accounts, they're likely to be people you want to talk to when you're shopping for a loan.\"", "title": "" }, { "docid": "cff3f36f2120e361ca04e52d14060b0a", "text": "Mint.com does a pretty good job at this, for a free service, but it's mostly for personal finance. It looks at all of your transactions and tries to categorize them, and also allows you to create your own categories and filters. For example, when I started using it, it imported the last three months of my transactions and detected all of my 'coffee house' transactions. This is how I learned that I was spending about $90 a month going to Starbucks, rather than the $30 I had estimated. I know it's not a 'system' like an accounting outfit might use, but most accounting offices I've worked with have had their own home-brewed system.", "title": "" }, { "docid": "71af7edbcf72f3dad0e202b4b56f0d58", "text": "\"This may be a bit advanced now, but once you start really working and get a place, I think this will apply more... Do I set up a bank account now? Yes. There is no reason not to. As an adult you will be using this much more than you think. Assuming you have a little money, you can walk in to any bank almost any day of the week and set up an account with them in very little time. Note that they may require you to be 18 if your parents won't be with you on the account. Otherwise, just ask any bank representative to help you do this. Just to be clear, if you can get a credit union account over a typical bank account, this is a great idea. Credit unions provide exactly the same financial services as a normal bank, but typically have variety of advantages over banks. Bank Account Parts Bank accounts typically have two parts, a checking account and a savings account. Your checking account typically is what you use for most day-to-day transactions and your savings account is generally used for, well, saving money. Having a bank account often gives you the following advantages: They give you an ability to store money without having large amounts of cash on hand. Once you start working regularly, you'll find you won't want to keep ~$600+ cash every two weeks in your wallet or apartment. They help you pay bills. When you set up your bank account, you will likely be able to get a Visa debit card which will process like a regular credit card but simply deduct funds from your checking account. You can use this card online to pay utilities (i.e. electricity and water), general bills (e.g. your cell phone and cable), purchase items (ex. at Amazon) or use it in stores to pay in lieu of cash. Be aware -- some banks will give you an ATM-only card before they send you the Visa debit card in the mail. This ATM-only card can only be used at ATMs as it's name implies. Similarly, if you can invest about ~$200 to build your credit, you can often get a deposit secured credit card attached to your account (basically a credit card where the bank keeps your money in case you can't pay your bill). If you treat this card with responsibility, you can eventually transition to an unsecured credit card. They save you hassles when cashing your check. If you don't have a bank where you can cash your check (e.g. you don't have an account), you will likely be charged check cashing fees (usually by places such as grocery stores or payday loan chains, or even other banks). Furthermore, if your check is over a certain amount, some places may refuse to cash your check period and a bank may be your only option. They give you a way to receive money electronically. The most common example of this is direct deposit. Many employers will send your money directly to your bank account instead of requiring you to cash a check. If they are prompt, this money gets to you faster and saves you trouble (on payday, you'll just receive a pay stub detailing your wages and the amount deposited rather than a check). Also, since you asked about taxes, you should know that when you do eventually file with the IRS, they have an option to receive your tax refund electronically as well (e.g. direct deposit into your bank account) and that can literally save you months in some cases depending on when you file your return and how many paper checks they have to process. Does it cost money to setup? It depends. Some banks have special offers, some don't. Most places will set up an account for free, but may require a minimum deposit to open the account (typically $50-$100). The Visa debit card mentioned above generally comes free. If you want a secured credit card as above, you will want about an additional $200 (so $250 - $300 total). Note that this is absolutely NOT required. You can exclusively use the Visa debit card above if you wish. Bank Account Fees Any fees charged when you have a bank account are usually minor anymore. Regardless, the bank will hand you a whole bunch of paperwork (mostly in legalese) detailing exactly how your account works. That said, the bank person helping set things up will cover what you need to know about keeping the account in plain English. The most common types of fee associated with a bank account are monthly maintenance fees and overdraft fees, but these aren't always necessarily charged. Likewise, there may be some other fees associated with the account but these vary from bank to bank. Monthly Maintenance Fees To give some examples... Overdraft Fees Overdraft fees are typically charged when you attempt to spend more money than you have in your bank account and the bank has to cover these charges. Overdraft fees typically apply to using paper checks (which it is unlikely you will be using), but not always. That said, it is very unlikely you will be charged overdraft fees for three reasons: Many banks have done away with these fees in lieu of other ways of generating revenue. Banks that still charge these fees usually have \"\"overdraft protection\"\" options for a little more money a month, effectively negating the possibility you will be charged these fees. The ability to deduct an amount of money from your checking account is now typically checked electronically before the payment is authorized. That is, using a Visa debit card, the card balance is checked immediately, and even when using paper check, most retailers have check scanning machines that do roughly the same thing. On a personal note, the bank that I have allows my account to be deducted below my checking account balance only if the payment is requested electronically (e.g. someone who has my card information charges me for a monthly service). In this case, the funds are simply listed in the negative and deducted from any amount I deposit till the proper amount is repaid (e.g. if I'm at -$25 dollars due to a charge when my account balance was $0 and then I deposit $100, my available balance will then be $75, not $100). Finally, per the comment by @Thebluefish, while I minimize the likelihood you will be charged overdraft fees, it is good to check into the exact circumstances under which you might be charged unexpectedly by your bank. Read the documentation they give you carefully, including any mailed updates, and you'll reduce the chance of receiving a nasty surprise. For reference, here are some of the fees charged by Bank of America. What about taxes? When you begin working, an employer will usually have you fill out a tax form such as a W-4 Employee's Withholding Allowance Certificate so that your employer can withhold the correct federal income tax from your wages. If they don't, then it is your responsibility to calculate and file your own income taxes (if you are self-employed, an independent contractor or paid under the table). If your employer is reputable, they will send you additional information (generally in February) you need to properly file your taxes prior to April 15th (the IRS tax deadline for most people). This additional information will likely be some variation of a W-2 Wage and Tax Statement or possibly a Form 1099-MISC. Do I have to worry about money in my bank account? Unless you have a significant amount in your bank savings account earning interest (see \"\"Should I save for the future?\"\" below), you won't have to pay any sort of tax on money in your bank account. If you do earn enough taxable interest, the bank will send you the proper forms to file your taxes. How do I file taxes? While it won't apply till next year, you will likely be able to fill out a Form 1040EZ Income Tax Return for Single and Joint Filers With No Dependents, as long as you don't have any kids in the meantime. ;-) You will either mail in the paper form (available at your local IRS office, post office, public library, etc.) or file electronically. There will be a lot of information on how to do this when the time comes, so don't worry about details just yet. Assuming your all paid up on your taxes (very likely unless you get a good paying job and take a lot of deductions throughout the year on your W-4), you'll probably get money back from the IRS when you file your tax return. As I mentioned above, if you have a bank account, you can opt to have your refund money returned electronically and get it much sooner than if you didn't have a bank account (again, possibly saving you literal months of waiting). Should I save for my future? If so, how much? Any good articles? Yes, you should save for the future, and start as soon as possible. It's outside the scope of this answer, but listen to your Economics professor talk about compound interest. In short, the later you start saving, the less money you have when you retire. Not that it makes much difference now, but you have to think that over 45 years of working (age 20-65), you likely have to have enough money for another 20+ years of not working (65-85+). So if you want $25,000 a year for retirement, you need to make ~$50,000 - $75,000 a year between your job and any financial instruments you have (savings account, stocks, bonds, CDs, mutual funds, IRAs, job retirement benefits, etc.) Where you should stick money your money is a complicated question which you can investigate at length as you get older. Personally, though, I would recommend some combination of IRA (Individual Retirement Account), long term mutual funds, and some sort of savings bonds. There is a metric ton of information regarding financial planning, but you can always read something like Investing For Dummies or you can try the Motley Fool's How To Invest (online and highly recommended). But I'm Only 17... So what should you do now? Budget. Sounds dumb, but just look at your basic expenses and total them all up (rent, utilities, phone, cable, food, gas, other costs) and divide by two. Out of each paycheck, this is how much money you need to save not to go into debt. Try to save a little each month. $50 - $100 a month is a good starting amount if you can swing it. You can always try to save more later. Invest early. You may not get great returns, but you don't need much money to start investing. Often you can get started with as little as $20 - $100. You'll have to do research but it is possible. Put money in your savings account. Checking accounts do not typically earn interest but money in savings accounts often do (that is, the bank will actually add money to your savings assuming you leave it in there long enough). Unfortunately, this rate of interest is only about 3.5% on average, which for most people means they don't get rich off it. You have to have a significant amount of money ($5,000+) to see even modest improvements in your savings account balance each month. But still, you may eventually get there. Get into the habit of putting money places that make you money in the long run. Don't go into debt. Don't get payday loans, pawn items, or abuse credit cards. Besides wrecking your credit, even a small amount of debt ($500+) can be very hard to break out of if you don't have a great paying job and can even make you homeless (no rent means no apartment). Remember, be financially responsible -- but assuming your parents aren't totally tight with money, don't be afraid to ask for cash when you really need it. This is a much better option than borrowing from some place that charges outrageous interest or making your payments late. Have an emergency account. As already mentioned in another excellent answer, you need to have money to \"\"smooth things out\"\" when you encounter unexpected events (your employer has trouble with your check, you have to pay for some sort of repair bill, you use more gas in your car in a month than normal, etc.) Anywhere from $200 - $2000+ should do it, but ideally you should have at least enough to cover a month of basic expenses. Build good credit. Avoid the temptation to get a lot of credit cards, even if stores and banks are dying to give them to you. You really only need one to build good credit (preferably a secured one from your bank, as mentioned above). Never charge more than you can pay off in a single month. Charging, then paying that amount off before the due date on your next statement, will help your credit immensely. Likewise, pay attention to your rent, utilities and monthly services (cell phone, cable, etc.). Even though these seem like options you can put off (\"\"Oh my electric bill is only $40? I'll pay that next month...\"\") late payments on all of these can negatively affect your credit score, which you will need later to get good loans and buy a house. Get health insurance. Now that the Affordable Care Act (ACA a.k.a Obamacare) has been enacted, it is now simpler to get health insurance, and it is actually required you have some. Hopefully, your employer will offer health coverage, you can find reasonably priced coverage on your own, or you live in a state with a health exchange. Even if you can't otherwise get/afford insurance, you may qualify for some sort of state coverage depending on income. If you don't have some sort of health insurance (private or otherwise), the IRS can potentially fine you when you file your taxes. Not to be too scary, but the fine as currently proposed is jumping up to about $700 for individuals in 2016 or so. So... even if you don't grab health insurance (which you absolutely should), you need to save about $60 a month, even if just for the fine. This answer turned out a bit longer than intended, but hopefully it will help you a little bit. Welcome to the wonderful world of adult financial responsibility. :-)\"", "title": "" }, { "docid": "ba6008c052119c3f76741b34749b5f0a", "text": "The rate itself is too small and the difference is small as well ... The cost of switching, even one visit to the Bank B, would cost you around $50 just to open an account you would have to visit once ... Think of changing if there are other benefits [like utility payments online, or integrated brokrage accounts etc] if they are same, just stick with it.", "title": "" }, { "docid": "2b0575f84d48dc745cabb99f48049fcd", "text": "No, in your situation it is not possible. Mostly, only three types of accounts are available to individuals: So, a complete foreigner can open account in India, only if he is working in India, a type of Savings account, and that account too will be linked to his resident status. If he leaves work, he needs to close this account. Edit: There are business accounts, and current accounts, but those are available only to businesses. Further read at SBI gives a good snapshot", "title": "" }, { "docid": "43bf814aee8a481c647ff68c9defa496", "text": "\"As others have noted, in the U.S. a checking account gives you the ability to write a check, while a savings account does not. I think you know what a check is even if you don't use them, right? Let me know if you need an explanation. Personally, I rarely write paper checks any more. I have an account for a small side business, and I haven't bothered to get new checks printed since I moved 6 years ago even though the checks still have my old address, because I've only written I think 3 paper checks on that account in that time. From the bank's point of view, there are all sorts of government regulations that are different for the two types of accounts. But that is probably of little concern to you unless you own a bank. If the software you have bought allows you to do the things you need to do regardless of whether you call the account \"\"savings\"\" or \"\"checking\"\", then ... who cares? I doubt that the banking software police will come to your house and beat you into unconsciousness and arrest you because you labeled an account \"\"checking\"\" that you were supposed to label \"\"savings\"\". If one account type does what you need to do and the other doesn't, then use the one that works.\"", "title": "" }, { "docid": "592ad3963c42c459197267cc2ced76b4", "text": "I keep several savings accounts. I use an online-only bank that makes it very easy to open a new account in about 2 minutes. I keep the following accounts: Emergency Fund with 2 months of expenses. I pretend this money doesn't even exist. But if something happened that I needed money right away, I can get it. 6 6-month term CDs, with one maturing every month, each with 1 month's worth of expenses. This way, every month, I'll have a CD that matures with the money I would need that month if I lose my job or some other emergency that prevents me from working. You won't make as much interest on the 6-month term, but you'll have cash every month if you need it. Goal-specific accounts: I keep an account that I make a 'car payment' into every month so I'll have a down-payment saved when I'm ready to buy a car, and I'm used to making a payment, so it's not an additional expense if I need a loan. I also keep a vacation account so when it's time to take the family to Disneyland, I know how much I can budget for the trip. General savings: The 'everything else' account. When I just NEED to buy a new LCD TV on Black Friday, that's where I go without touching my emergency funds.", "title": "" } ]	fiqa
4c451bbc4846c86b71c3f2525eef9726	Is a real estate attorney needed for builder deposit contract?	[ { "docid": "7561647c86ee2f2e4b5a95ab543ff10a", "text": "You are planning on signing a contract for, likely, hundreds of thousands of dollars, and plan on paying, likely, tens of thousands of dollars in a deposit. For a house that is not built yet. This isn't particularly unusual, lots of people do this. But, you need a lawyer. Now, before you sign anything. Your agent may be able to recommend a lawyer, but beware; your agent may have a conflict of interest here.", "title": "" }, { "docid": "f752478bb338482f979c351338c9bfd0", "text": "You need to let a lawyer look at it. Concerns you have include:", "title": "" } ]	[ { "docid": "eaec0527d5e0ab0cafc2ab3505c52c0c", "text": "If I understand correctly you describe putting a hold on an appartment as such: A sum of money that you give to the owner of the appartment to let them hold it for you because you are probably going to rent. In case you back out of the deal, this money can mitigate the expected loss from turning down other candidates. After asking them to hold the appartment for you, you decided not to rent. Also, you used the bank to get back the hold sum. Regardless of the legal details, it seems very clear to me that after putting down a hold and walking away, you should not get the money back. There may have been some things that distracted/confused you (call about the key), but if you actually look at the things that happened it seems both right and practical to pay them their reclaimed hold as soon as possible.", "title": "" }, { "docid": "3e2719b026c9708a7d51c44bc55c3aff", "text": "\"The Trustee has allowed me to act as his \"\"agent\"\", continuing to pay bills, and take care of much of the administrative affairs for my mother's estate since I did all of it for years before she passed away. I was not paid for any of this work. ... The expenses were more than $30K last year, and there is still a punch list to go this year. The trust should reimburse your expenses and deduct them on the trust tax return. Since the Trust owned the property in 2015, and I will receive ownership this month, can last year's expenses incurred for the Trust be deducted again future income for my property this year? Not exactly. The trust will file its own tax return and will report the income/loss attributed to the beneficiaries per the trust rules. What is attributed to you will flow to your Schedule E. From there you own it and if it is a passive activity where the loss is limited - you can carry it forward and offset with future gain. The trustee will have to deal with all the paperwork. Do 1099-misc forms need to be filed for the contractors who worked to get it ready for rental? It is my understanding that since 2010 (and before 2010) landlords who are not in real-estate trade or business are not required to send out 1099. But it won't hurt if you do, also. In any case - for all of these issues you should talk to a tax adviser (EA/CPA licensed in your State).\"", "title": "" }, { "docid": "1fa2ff1b70c096390eb86367e2b0199b", "text": "A real estate contract is a form of seller financing. It is similar to a mortgage, but rather than borrowing money from a lender or bank to buy real estate, the buyer makes payments to the real estate owned, or seller, until the purchase price is paid in full. If you want to real estate purchase and sale contracts, then you can visit our office. We can provide the best deal of the real estate contact.", "title": "" }, { "docid": "b11a00537c257f650ed6a54ae8d0c128", "text": "I'm not sure about your first two options. But given your situation, a variant of option three seems possible. That way you don't have to throw away your appraisal, although it's possible that you'll need to get some kind of addendum related to the repairs. You also don't have your liquid money tied up long term. You just need to float it for a month or two while the repairs are being done. The bank should be able to preapprove you for the loan. Note that you might be better off without the loan. You'll have to pay interest on the loan and there's extra red tape. I'd just prefer not to tie up so much money in this property. I don't understand this. With a loan, you are even more tied up. Anything you do, you have to work with the bank. Sure, you have $80k more cash available with the loan, but it doesn't sound like you need it. With the loan, the bank makes the profit. If you buy in cash, you lose your interest from the cash, but you save paying the interest on the loan. In general, the interest rate on the loan will be higher than the return on the cash equivalent. A fourth option would be to pay the $15k up front as earnest money. The seller does the repairs through your chosen contractor. You pay the remaining $12.5k for the downpayment and buy the house with the loan. This is a more complicated purchase contract though, so cash might be a better option. You can easily evaluate the difficulty of the second option. Call a different bank and ask. If you explain the situation, they'll let you know if they can use the existing appraisal or not. Also consider asking the appraiser if there are specific banks that will accept the appraisal. That might be quicker than randomly choosing banks. It may be that your current bank just isn't used to investment properties. Requiring the previous owner to do repairs prior to sale is very common in residential properties. It sounds like the loan officer is trying to use the rules for residential for your investment purchase. A different bank may be more inclined to work with you for your actual purchase.", "title": "" }, { "docid": "bb9ea76eef68b7af44e872e2f37d6569", "text": "Sorry, but I think you really do need an attorney here. This is the kind of minefield where knowing all the precedents and edge cases can make a huge difference in what you can or can't do, and a misplaced comma can make or break your case. Note that AT BEST you could sell your own interest in the house -- owning the note does not mean owning the property, it only means that they issued the note on the strength of your share of the property. And a half-interest in a single family house has little value outside the family, except to sell it to whoever owns the other half. Which is probably the best answer: Sell your half to your Aunt, if she can afford to buy it. She then gets sole control of the house, and you get the money you seem to need right now, and everyone in the family is much less stressed.", "title": "" }, { "docid": "2de869e9b4c67e8ad0198cdafdbc1620", "text": "Per Md. REAL PROPERTY Code Ann. § 8-203: (d) (1) (i) The landlord shall maintain all security deposits in federally insured financial institutions, as defined in § 1-101 of the Financial Institutions Article, which do business in the State. (ii) Security deposit accounts shall be maintained in branches of the financial institutions which are located within the State and the accounts shall be devoted exclusively to security deposits and bear interest. (iii) A security deposit shall be deposited in an account within 30 days after the landlord receives it. (iv) The aggregate amount of the accounts shall be sufficient in amount to equal all security deposits for which the landlord is liable. (2) (i) In lieu of the accounts described in paragraph (1) of this subsection, the landlord may hold the security deposits in insured certificates of deposit at branches of federally insured financial institutions, as defined in § 1-101 of the Financial Institutions Article, located in the State or in securities issued by the federal government or the State of Maryland. (ii) In the aggregate certificates of deposit or securities shall be sufficient in amount to equal all security deposits for which the landlord is liable. As such, one or more accounts at your preference; it's up to the bank how to treat the account, so it may be a personal account or it may be a 'commercial' account depending on how they treat it (but it must be separate from your personal funds). A CD is perhaps the easiest way to go, as it's not a separate account exactly but it's easily separable from your own funds (and has better interest). You should also note (further down on that page) that you must pay 3% interest, once per six months; so try to get an account that pays as close as possible to that. You likely won't get 3% right now even in a CD, so consider this as an expense (and you'll probably find many people won't take security deposits in many situations as a result).", "title": "" }, { "docid": "29392f0f37fbabadd75e643e01fc97a7", "text": "\"Getting a specific service recommendation is off-topic, but the question of what type of professional you need seems on-topic to me. You may be looking for more than one professional in this case, but you could try these to start your search: Different people do things differently, but I think it would be pretty common to have a relationship (i.e. contract, retainer agreement, at least have met the person in case you have an \"\"emergency\"\") with a business law attorney and either a CPA or tax attorney. You may try not to use them too much to keep costs down, but you don't want to be searching for one after you have an issue. You want to know who you're going to call and may establish at least a basis working relationship.\"", "title": "" }, { "docid": "6bf287ee3b6953698f41118db739d1d4", "text": "They are looking at your work history to see that you have maintained a similar level of income for a period of time, and that you have a reasonable expectation to continue that for the foreseeable future. They are looking to make a commitment for 15-30 years. They see the short term contract, and have no confidence in making a guess to your ability to pay. Before the real estate bubble burst, you would have had a chance with a no documentation loan. These were setup for people who earned fluctuating incomes, mostly due to being commissioned based. They were easily abused, and lenders have gotten away from them becasue they were burned too often. Just like building your credit rating over time, and your down payment over time, you might have to wait to build a work history.", "title": "" }, { "docid": "fab868581152d6464183e52963bacff7", "text": "\"To the best of my knowledge, in California there's no such thing as registering a place as a business. There's zoning (residential/commercial/mixed/etc), and there's \"\"a business registered at a place\"\". But there's no \"\"place registered as a business\"\". So you better clarify what it is that you think your landlord did. It may be that the place is used for short term rentals, in which case the landlord may have to have registered a business of short term rentals there, depending on the local municipal or county rules. Specifically regarding the deposit, however, there's a very clear treatment in the California law. The landlord must provide itemized receipt for the amounts out of the deposit that were used, and the prices should be reasonable and based on the actual charges by the actual vendors. If you didn't get such a receipt, or the amounts are bogus and unsubstantiated - you have protection under the CA law.\"", "title": "" }, { "docid": "e1aa1ce6aba2c9edee99881da6cbb51b", "text": "Why should a bank get into construction specifically? Lots of business opportunities require capital. Conceivably banks could build factories, develop consumer electronics, complete with SpaceX, etc. It's all capital in, profits out, with varying levels of risk and returns. There's nothing special about constructing apartments. The reason banks don't run businesses is because there are plenty of private firms that compete with each other for business. What's the chance that a bank, with all its bureaucracy, can deliver cheaper apartments than an apartment developer? Pretty low in fact, and that's why they would rather lend to an apartment developer rather than building the apartments themselves. Banks are in the business of competing with other banks. The main work they do is to sort out good investments from poor ones. And if they can do that just a bit more efficiently than their competitors, they make big bucks. For example, it might only take a few additional hours to better vet a deal worth millions. Whereas with an apartment building, you wouldn't be able to make that amount of money per hour even if the materials and labor cost you nothing.", "title": "" }, { "docid": "6dee4f8ad5f540f7e52067a6528e9df5", "text": "There is heap of instances where you may want a franchise lawyer. For instance, during the ending of your franchise lawyer California agreement, an attorney can make certain that the conditions of the agreement are being duly observed. Likewise, in instances of statutory compliance, your attorney can not only interpret and defend you but can also work as a link between you and the franchise lawyer California. This can help break up whatever matters or concerns arising out of a franchisor's allegation.", "title": "" }, { "docid": "285e035044dccf4f29173d10b888d0c5", "text": "Without the contract it's hard to say for sure, but Consumer Reports indicates that it's pretty easy to lose these deposits; they're not as well protected as other deposits or purchases (depending on your state and other details). You should make an effort to comply with all of the requests from the financing arm promptly, and in particular you should probably highlight that you could afford to pay for the car in cash (and be prepared to show bank/money market/investment statements to back that up). Credit is mostly a numbers game, but there is a human on the other side making the decision (assuming you're remotely close) and that makes a big difference. I would be prepared to walk away from your deposit if they come back and offer you a 5% APR or similar (and you're uncomfortable with the loan at that rate) - over 5 years, a $20k loan at 5% APR will cost you several thousand dollars; it might be worth it even if they don't give you your deposit back. And if you're clearly ready to walk away from the deposit, that might cause them to negotiate in better faith. Some tips, both from that article and my general experience:", "title": "" }, { "docid": "de748d4e51918166b8ed834aba87e209", "text": "Some requirements needed for availing loans are FICA documents, a certain percentage of equity of the purchase price and A signed Offer to Purchase/Deed of Sale etc. A single loan can be availed that will include both the purchase and construction components of the investor’s project.", "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": "e34733e8209beceff2f237e0e73fdc3c", "text": "\"The Answer is yes according to multiple online sources and my local bank. This approach is a common technique to building your own home. You finance the land, build the simplest possible dwelling (say a garage with 1 bathroom/bedroom), refi into a mortgage and get cash back and then build your \"\"real house\"\" or add on, etc. This eliminates the banks demands that come with a \"\"construction loan\"\" and saves you 10s of thousands in the process (fees, contractors, scheduling, design, etc)\"", "title": "" } ]	fiqa
375edb185041c0cea6f13ae2d2381965	Sell or keep rental Property?	[ { "docid": "a4dd10f15f9081bfd2123bee0dc06b18", "text": "Sell the house, in the scenario you describe he is using the property as an investment with a $250 per month buy-in. This investment doesn't make a return right now and when you add in the cost of dealing with the tenant (even if he doesn't have those cost now, he will when they move out)he is out of more than $250 a month and he has no direct knowledge that the value will definitely increase. He would be better spent selling the house and putting the funds into an investment, even a risky investment. It will have less maintenance cost associated with the risky investment than the rental property. Besides sitting on the property for 10-15 years would cost him 30-45k plus the cost of re-renting the house when empty.Not to mention the inevitable increases in taxes over that time which will either increase his deficit or eat up the rent increase he is able to charge. Don't take the loss on the sale, just short sale it and take the money and invest! One last thought... An alternative is to creatively finance a sale (take payments from a buyer until they can buy outright) that will cover the FULL mortgage and get him the price he needs. You can look up owner financing to find out more on how to do this. Hope this helps!", "title": "" }, { "docid": "28add8d067474fc049e881940e368e57", "text": "How is the current mortgage payment broken out? I have a mortgage on a rental property with a payment of $775, but $600 is principal. If I were at breakeven on a sale or a bit underwater, I'd be better off just holding still, the tenant paying the loan down over $7000/year. You question is a good one, but a good answer would require more details. A bank may not agree to a short sale on an investment property, especially since there's a second property to go after. I'm not making a judgement, just saying, it's not a slam-dunk to just short sell it.", "title": "" }, { "docid": "584d4fc1a1307f5a2858d74f936892f4", "text": "And he has to pay for it every home repair and every month the property sets empty. His loss each month is not $250, but probably closer to $500. In generally you need to clear at least $200 ABOVE PTI (principle, taxes and interest) to cover repair and the like to property. From your post, it sounds like your dad was forced into the land-lord business by the recession. Unless he plans to hold the property until its rental value has increased by $500 a month, he should consider selling it and writing-off the loss. Losing money bit by bit on a house isn't a tax write-off event. Selling a property for less than you bought it for generally is. FYI, I got the $500/month loss by assuming that repairs/emptiness/etc will cost you about $200 a month, and added $50 for your dad's time managing the property.", "title": "" } ]	[ { "docid": "8dd79db65f2185bdc8fe64923d0173c3", "text": "\"Is the mortgage debt too high? The rental property is in a hot RE market, so could be easily sold with significant equity. However, they would prefer to keep it. Given the current income, there is no stress. However in absence of any other liquid [cash/near cash] assets, having everything locked into Mortgage is quite high. Even if real estate builds assets, these are highly illiquid investments. Have debt on such investments is risky; if there are no other investments. Essentially everything looks fine now, but if there is an crisis, unwinding mortgage debt is time consuming and if it forces distress sale, it would wipe out any gains. Can they afford another mortgage, and in what amount? (e.g. they are considering $50K for a small cabin, which could be rented out). I guess they can. But should they? Or diversify into other assets like stocks etc. Other than setting cash aside, what would be some good uses of funds to make sure the money would appreciate and outpace inflation and add a nice bonus to retirement? Mutual Funds / Stocks / bullions / 401K or other such retirement plans. They are currently in mid-30's. If there is ONE key strategy or decision they could make today that would help them retire \"\"early\"\" (say, mid-50's), what should it be? This opinion based ... it depends on \"\"what their lifestyle is\"\" and what would they want their \"\"lifestyle\"\" to be when they retire. They should look at saving enough corpus that would give an year on year yield equivalent to the retirement expenses.\"", "title": "" }, { "docid": "5069019873055d17bce6fac7e64c7c24", "text": "You could use the money to buy a couple of other (smaller) properties. Part of the rent of these properties would be used to cover the mortgage and the rest is income.", "title": "" }, { "docid": "deb2bff6905ef128e60e380efdfb843f", "text": "In general you do not want to show a taxable gain on rental properties if you can avoid it. One of the more beneficial advantages of owning cash flowing rental properties, is that the income is tax deferred because of the depreciation. I say deferred, because depreciation affects the cost basis of your property. Also since you are considering financing, it sounds like you don't need the cash flow currently. You usually can get better returns by financing and buying more rental properties, especially with investment mortgages at historical lows (Win via inflation over time)", "title": "" }, { "docid": "87da576f3c8012a74209d6db176a2c7a", "text": "\"You are assuming 100% occupancy and 100% rent collection. This is unrealistic. You could get lucky and find that long term tenant with great credit that always pays their bills... but in reality that person usually buys a home they do not rent long term. So you will need to be prepared for periods of no renters and periods of non payment. The expenses here I would expect could wipe out more than you can make in \"\"profit\"\" based on your numbers. Have you checked to find out what the insurance on a rental property is? I am guessing it will go up probably 200-500 a year possibly more depending on coverage. You will need a different type of insurance for rental property. Have you checked with your mortgage provider to make sure that you can convert to a rental property? Some mortgages (mine is one) restrict the use of the home from being a rental property. You may be required to refinance your home which could cost you more, in addition if you are under water it will be hard to find a new financier willing to write that mortgage with anything like reasonable terms. You are correct you would be taking on a new expense in rental. It is non deductible, and the IRS knows this well. As Littleadv's answer stated you can deduct some expenses from your rental property. I am not sure that you will have a net wash or loss when you add those expenses. If you do then you have a problem since you have a business losing money. This does not even address the headaches that come with being a landlord. By my quick calculations if you want to break even your rental property should be about 2175/Month. This accounts for 80% occupancy and 80% rental payment. If you get better than that you should make a bit of a profit... dont worry im sure the house will find a way to reclaim it.\"", "title": "" }, { "docid": "257c70a9f954a96a7657e3761647efee", "text": "Think carefully about the added expenses. It may still make sense, but it probably won't be as cheap as you are thinking. In addition to the mortgage and property taxes, there is also insurance and building maintenance and repairs. Appliances, carpets, and roofs need to be replaced periodically. Depending on the area of the country there is lawn maintenance and now removal. You need to make sure you can cover the expenses if you are without a tenant for 6 months or longer. When tenants change, there is usually some cleaning and painting that needs to be done. You can deduct the mortgage interest and property taxes on your part of the building. You need to claim any rent as income, but can deduct the other part of the mortgage interest and taxes as an expense. You can also deduct building maintenance and repairs on the rental portion of the building. Some improvements need to be depreciated over time (5-27 years). You also need to depreciate the cost of the rental portion of the building. This basically means that you get a deduction each year, but lower the cost basis of the building so you owe more capital gains taxes when you sell. If you do this, I would get a professional to do your taxes at least the first year. Its not hard once you see it done, but there are a lot of details and complications that you want to get right.", "title": "" }, { "docid": "faafc603fc4fdc218a969f17936f5d17", "text": "Our two rentals have yielded 8.5% over the past two years (averaged). That is net, after taxes, maintenance, management, vacancy, insurance, interest. I am only interested in cash flow - expenses / original investment. If you aren't achieving at least 4.5-5% net on your original investment you probably could invest elsewhere and earn a better return on a similar risk profile.", "title": "" }, { "docid": "75afbb044a044305e7c497e1093aa9a4", "text": "In order to arrive at a decision you need the numbers: I suggest a spreadsheet. List the monthly and annual costs (see other responses). Then determine what the market rate for rental. Once you have the numbers it will be clear from a numbers standpoint. One has consider the hassle of owning property from a distance, which is not factored into the spreadsheet", "title": "" }, { "docid": "7afe1fea85b8fbd92dabd49aec409b5d", "text": "With student loans at 2%, I wouldn't pay a dime over minimum on that, and I certainly wouldn't sell an investment property to pay them off, you can get CD's that beat 2% interest. With the rentals, you could sell the one that isn't performing as well and pay no capital gains tax if you lived in it 2 of the last 5 years (counting 5 years back from sale date). That'd be a nice chunk of money for your down-payment. The risk of using proceeds to buy a different rental property is that you may find you don't like being a distance landlord, and then you'd lose money selling or be stuck doing something you don't enjoy for a while until you can sell without a loss. Like you mentioned, the risk of selling either/both rental properties is that if the Arizona housing/rental markets do well you'd have given up your position and missed out. Ultimately, I think it's about your desired timeline, if you are content to wait a while to buy in San Diego, you could have a handsome down payment, will know whether or not you like being a distance landlord, and can sell/keep the rentals accordingly. Alternatively, if you want to get a house in San Diego sooner, then selling one or both rentals gets you there faster. If I was in your position, I'd probably sell the rental that I lived in and put that toward a down-payment on a primary residence, keeping the other rental for now and trying my hand at being a distance landlord.", "title": "" }, { "docid": "0c83a16dae83b4e8deba713a10e4b6ad", "text": "You may be in a situation where buying is preferred, especially because you can enter the market in a strong position - with a 20% down payment. If you have the financial ability to assume the risk of owning, you may be better off. I would consider two things. Renting is purchasing a service. You are buying the flexibility to move with minimum hassle and the landlord is assuming the risk of owning the asset (property). They will make money on you, like any service provider. Buying is purchasing an asset. You are buying the underlying asset and assume all the risks associated with it. This is large, unforeseen maintenance, fees, taxes, depreciation, etc... Some of these risks were passed to you as a renter, but some were not. Just like purchasing $400k in stock, if you have to sell when the market is down, you lose big. You win if you can hold. Unlike a stock, real estate will eat your cash in taxes and repairs unless it is rented. If you are willing to be a long-distance landlord, this may work out. Understand that property management fees will eat into your rent income and being long-distance will give more potential for a bad tenant to ruin your property value. These and other factors (e.g. vacancy rate) will increase your risk of loss and should be considered. Some of this will be your preference, since you will spend much more time dealing with buying/selling/property management as opposed to a more clean rental situation. Is this hassle worth the savings? For many, yes; others, no. Finally, I hope this calculator can help clarify some of the financial aspects for you. http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0 Good Luck!", "title": "" }, { "docid": "a873928ae3e926d6bf8cd38ab90ef9d7", "text": "You have some of the math right, but are missing a few things. Here's what I can offer - if I leave anything out, someone please expand or clarify. Rental income can be reduced by mortgage interest and maintenance costs (as you mentioned), but also by property tax payments, association fees, insurance costs, landlord expenses, and depreciation. Note that if you don't live in the property for 3 years, you'll have to pay capital gains tax if/when you sell the house. You can live in it again for 2 of the last 5 years to avoid this. Many people recommend only assuming you will get 10 months of rental income a year, to account for transitions between tenants, difficult in finding new tenants, and the occasional deadbeat tenant. This also adds a buffer for unexpected problems you need to fix in the house. If you can't at least break even on 10 months of income a year, consider the risk. I think there are also some cases where you need to repay depreciation amounts that you have deducted, but I don't know the details. Renting out a house can be fun and profitable, but it's very far from a sure thing. I'd always recommend preparation and caution, and of course talking to professionals about the finances, accounting, and lease-writing. Good luck!", "title": "" }, { "docid": "5a1293a666b8079d199978def4663f03", "text": "Getting the first year right for any rental property is key. It is even more complex when you rent a room, or rent via a service like AirBnB. Get professional tax advice. For you the IRS rules are covered in Tax Topic 415 Renting Residential and Vacation Property and IRS pub 527 Residential Rental Property There is a special rule if you use a dwelling unit as a personal residence and rent it for fewer than 15 days. In this case, do not report any of the rental income and do not deduct any expenses as rental expenses. If you reach that reporting threshold the IRS will now expect you to to have to report the income, and address the items such as depreciation. When you go to sell the house you will again have to address depreciation. All of this adds complexity to your tax situation. The best advice is to make sure that in a tax year you don't cross that threshold. When you have a house that is part personal residence, and part rental property some parts of the tax code become complex. You will have to divide all the expenses (mortgage, property tax, insurance) and split it between the two uses. You will also have to take that rental portion of the property and depreciation it. You will need to determine the value of the property before the split and then determine the value of the rental portion at the time of the split. From then on, you will follow the IRS regulations for depreciation of the rental portion until you either convert it back to non-rental or sell the property. When the property is sold the portion of the sales price will be associated with the rental property, and you will need to determine if the rental property is sold for a profit or a loss. You will also have to recapture the depreciation. It is possible that one portion of the property could show a loss, and the other part of the property a gain depending on house prices over the decades. You can expect that AirBnB will collect tax info and send it to the IRS As a US company, we’re required by US law to collect taxpayer information from hosts who appear to have US-sourced income. Virginia will piggyback onto the IRS rules. Local law must be researched because they may limit what type of rentals are allowed. Local law could be state, or county/city/town. Even zoning regulations could apply. Also check any documents from your Home Owners Association, they may address running a business or renting a property. You may need to adjust your insurance policy regarding having tenants. You may also want to look at insurance to protect you if a renter is injured.", "title": "" }, { "docid": "1018d9e6c1f99370dcffd85bd768bfaf", "text": "To your secondary question: Appropriately consider all estimated numbers involved with keeping the house compared to your closest estimate of what the home could sell for. Weigh out the pros and cons yourself as a stranger will not be able to 100% appreciate what you value and dislike. Remember to include insurances, taxes, HOA(s), and the actual mortgage payment. Depending on how you also plan to rent out the property, include whichever utilities you intend to cover (if any). There will also be costs for property management and upkeep as things will break overtime and tenants will not hesitate to get you (or your management) to fix them, either way that means you are paying. I would also keep in mind while homes typically appreciate in value there is a higher risk with tenants for the value to depreciate to damages and poor upkeep. There are increased legal risks to renting, so be sure you have properly vetted whichever management you are going with. In extreme circumstances you also could be required to retain an attorney to defend yourself again litigation because whichever management team you hire will most likely defend themselves and not include you in that umbrella. My family lives in the LA area as well and a judge refused to throw out an obvious frivolous suit when my parents attempted to rent out a house. The possible renters after signing the main paperwork never showed to finish a second set of documents for renting. Parents immediately declined to rent to these people as they missed something so important without any explanation and they sued claiming racism, emotional damages, and some other really crazy things despite my parents never having met them (first meeting was between property management and renters only). Personally and professionally, I would only suggest renting our the place and not selling if you can turn a profit after all the above mentioned costs. If renters are only paying to keep the property in the black you have yourself a non-earning asset which WILL be damaged over time and require repairs which will come out of your pocket. Also, while the property is unoccupied you also must remember it is not earning at that time. Much of this may sound obvious, overcautious, etc... I simply wish to provide my family's experience to help you in making your decisions. Best of luck with your endeavor. Edit: Also, you will be required to report all earned rental income on your taxes. They will fall under the Schedule E and possibly K-1 area. I would strongly recommend consulting with an actual accountant about the impacts to you.", "title": "" }, { "docid": "85fb7e40d6726fddd153b282009a0666", "text": "Sounds like you have a nice rental on your hands, honestly, if it's blue-collar-ish material. Not too expensive for a rental. Is the rental market fairly strong there? You're probably looking at $400-$500 per month income after you pay everybody. (My property manager takes 10% of gross rents and she would inspect the property quarterly for me.) I'd take as many of those as I can get, though if I had ten of them I could be set for the rest of my life. :) That way you can offset any losses you might incur by selling now.", "title": "" }, { "docid": "b9eba242b203aa7e35353ed409783780", "text": "I'd rent and put the $30K/ yr into savings. When the short sale comes off your credit, you'll have a substantial downpayment. You don't mention the balance, but the current rate you're paying is 3% too high. Even if you get the rate reduced, you have a $100K issue. I recommend reading through Will Short Sale Prevent Me From Getting VA Home Loan Later? A bit different question, but it talks more about the short sale. A comment for that question makes a key point - if you have a short sale, will the bank chase you for the balance? If not, you have a choice to make. Adding note after user11043 commented - First, run the numbers. If you were to pay the $100K off over 7 years, it's $1534/mo extra. Nearly $130K, and even then, you might not be at 80% LTV. I don't know what rents are like in your area, but do the math. First, if the rent is less than the current mortgage+property tax and maintenance, you will immediately have better cash flow each month, and over time, save towards the newer house. If you feel compelled to work this out and stay put, I'd go to the bank and tell them you'd like them to recast the loan to a new rate. They have more to lose than you do, and there's nothing wrong with a bit of a threat. You can walk away, or they can do what's reasonable, to just fix your rate. With a 4% rate, you'd easily attack the principal if you wish. As you commented above, if the bank offers no option, I'd seriously consider the short sale. There's nothing wrong with that option from a moral standpoint, in my opinion. This is not Bedford Falls, and you are not hurting your neighbors. The bank is amoral, if not immoral.", "title": "" }, { "docid": "c3ac0b78be10b95f31383ab7fc2eb0a9", "text": "He owns some giants. I'd bet Coca-Cola is his biggest cash cow. This is a non-story. The revenue naturally follows actual value provided, as opposed to buying and selling shares with the swings of the stock market. Buffet buys and holds, and builds and collects the revenue from his companies, that's been his core philosophy since the beginning.", "title": "" } ]	fiqa
d8b0fc7ca51312f3db3810e9a1bb282f	Is it common for a new car of about $16k to be worth only $4-6k after three years?	[ { "docid": "c5778c02b5f7bc25fa3180e5e555eb28", "text": "It depends completely on the car. Some cars retain their value much better, and others drop in value like a rock (no pun intended). The mileage and condition on a car also has a huge impact on value. According to this site, cars on average lose 46% of their value in three years, so seeing one that drops 62% in roughly 3 years does not seem impossible. That value could also have been trade-in value, which is significantly lower than what you could get with a private party sale (or what you'd pay to get that same car from a dealer) One example: a new Ford Taurus (lowest model) has a Kelly Blue Book value of $28,000. A 2014 Taurus (lowest model) with average mileage and in fair condition has a private party value of about $12,000, for a 57% drop in value. Note: I picked Taurus because it's a car that should not have exceptional resale value (unlike BMW, trucks, SUVs), not to make any kind of judgement of the quality or resellability of the car)", "title": "" }, { "docid": "78c7b2bf71f314407d951a11d5e096fb", "text": "\"It's possible the $16,000 was for more than the car. Perhaps extras were added on at purchase time; or perhaps they were folded into the retail price of the car. Here's an example. 2014: I'm ready to buy. My 3-year-old trade-in originally cost $15,000, and I financed it for 6 years and still owe $6500. It has lots of miles and excess wear, so fair blue-book is $4500. I'm \"\"upside down\"\" by $2000, meaning I'd have to pay $2000 cash just to walk away from the car. I'll never have that, because I'm not a saver. So how can we get you in a new car today? Dealer says \"\"If you pay the full $15,000 retail price plus $1000 of worthless dealer add-ons like wax undercoat (instead of the common discounted $14,000 price), I'll eat your $2000 loss on the trade.\"\" All gets folded into my new car financing. It's magic! (actually it's called rollover.) 2017: I'm getting itchy to trade up, and doggone it, I'm upside down on this car. Why does this keep happening to me? In this case, it's rollover and other add-ons, combined with too-long car loans (6 year), combined with excessive mileage and wear on the vehicle.\"", "title": "" }, { "docid": "c4454d8ffce998d225e20eb9e5771fb5", "text": "It isn't common to lose that much value in 3 years, but it is possible. If you don't take care of small dents, scratches, etc., you can quickly reduce the value far beyond what you might expect looking at graphs. Another big factor is the trim level of the car that you purchase. If you spend $30,000 for the highest trim level of a car, instead of $22,000 for the lowest trim level, the higher trim car could lose 50% of it's value while the lower trim car loses only 35%. There's no way to know why the OP of your linked question had such a large loss, but again, that's not the usual experience. It is definitely a good idea to consider used though.", "title": "" } ]	[ { "docid": "d656c57d1205ae4ee389bed0fd9b70d4", "text": "New tires will increase the resale value of the car; while not by the full cost of the tires, it will not be entirely a sunk cost. You'd need to factor that in and find out how much the new tires increase the resale value of the car to determine how much they would truly cost you. However, I suspect they would cost you less than a $25,000 car a year early would. That new car would cost some amount over time - it sounds like you buy a new car every 8 years or so? So it would cost you $25/8 = $3.3k/year. That would, then, be the overall cost of the new car a year early - $3.3k (as it would mean one less year out of your old car, so assuming it was also $25k/8 year or similar, that year becomes lost and thus a cost).", "title": "" }, { "docid": "245336b48b3c31776ed8abff41e15592", "text": "Edmunds.com has a really cool guide that calculates some of these intangibles for a wide swath of cars under their True Cost to Own Ratings section. I highly recommend it.", "title": "" }, { "docid": "28d242f7c2ac47f3f855c8fc7f4ac7c1", "text": "Nothing's generating a whole lot of interest right now. But more liquid and stable is better (cash or cash-like). But a related question: Why a new car? You can knock thousands of dollars off of the price of a comparable vehicle by buying one that's one or two years old. Your new vehicle loses thousands of dollars in value the moment it goes off the lot.", "title": "" }, { "docid": "a126eabc0702abd8448d4555f3a2125b", "text": "I tend to agree with Rocky's answer. However it sounds like you want to look at this from the numbers side of things. So let's consider some numbers: I'm assuming you have the money to buy the new car available as cash in hand, and that if you don't buy the car, you'll invest it reasonably. So if you buy the new car today, you're $17K out of pocket. Let's look at some scenarios and compare. Assuming: If you buy the new car today, then after 1 year you'll have: If you keep the old car, after 1 year you get: After 2 years, you have: And after 3 years, you're at: Or in other words, nothing depletes the value of your assets faster than buying the new car. After 1 year, you've essentially lost $5K to depreciation. However, over the short term the immediate cost of the tires combined with the continued depreciation of the old car do reduce your purchasing power somewhat (you won't be able to muster $25K towards a new car without chipping in a bit of extra cash), and inflation will tend to drive the cost of the new car up as time goes on. So the relative gap between the value of your assets and the cost of the new car tends to increase, though it stays well below the $5k that you lose to depreciation if you buy the new car immediately. Which is something that you could potentially spin to support whichever side you prefer, I suppose. Though note that I've made some fairly pessimistic assumptions. In particular, the current U.S. inflation rate is under 1%, and a new car may depreciate by as much as 25% in the first year while older cars may depreciate by less than the 8% assumed. And I selected the cheapest new car price cited, and didn't credit the tires with adding any value to your old car. Each of those aspects tends to make continuing to drive the older car a better option than buying the new one.", "title": "" }, { "docid": "538ef3adfa102a7b779d2a954447ef04", "text": "I respectfully disagree with @JohnFX's comment regarding new vs used. (John knows what is talking about though; he gave an awesome answer on buying a car: What are some tips for getting the upper hand in car price negotiations?) The answer to your question is based on whether or you not you can stand to have a small, loud, cheap but reliable car for the next 10 or 15 years. If you plan to keep your new car until it dies 20 years from now, then a new car can be a fine choice. I just bought a car and the difference between my 2013 Hyundai and a comparable 2012 Hyundai wasn't much. Furthermore, it was hard to even find a 2012 (which justifies the higher price from dealerships and the private market). Doing math in my head told me the reduced usage I will get out of the car wasn't offset by the slightly lower price. Depending on the specific age, insurance on newer cars can be cheaper than insurance on older cars. (But you have to have carry more insurance, so consider that as well.) There might not be a different between a 2010 and a 2012, but there will likely be for a 2005 and the 2013. New cars can be cheaper to operate. Lower fuel costs, better safety and possibly pollution costs. They are tuned up and you know everything about their history. Repairs and factory warranties might not be available on a used car, so if you car turns out to be a problem, your out of pocket is limited. These programs don't mean anything. Get an independent certified mechanic to check out any used car you buy. If the dealer won't let you get the car checked out, then they aren't worth your business. Certified cars don't justify their cost according to consumer reports, they are more for marketing than reliability. Don't waste money on a third party warranty. Either the car is good and doesn't need it, or it needs a warranty and you shouldn't buy it. If you new car comes with a factory warranty, that is fine. Radio host Clark Howard is indifferent if you want to purchase a factory warranty separately, but never a third party. Just out of college, you probably will be better off spending the least amount of money you can for a good used car. If for no other reason, this likely isn't going to be your car in the near future. (Only you can answer that) If you have a feeling you won't keep your tiny car well into your 30s, then definitely don't buy a new car. Also, my experience only applies to my make and model. Certain models of cars keep their value and the difference between new and used isn't much for the most recent model years. But there are many more makes and models that don't pan out that way.", "title": "" }, { "docid": "ab573c1f875dcbc6bc45473c81083849", "text": "\"A while back I sold cars for a living. Over the course of 4 years I worked for 3 different dealerships. I sold new cars at 2 and used at the last one. When selling new cars I found that the majority of people buying the higher end cars honestly shouldn't have been - 80%+. They almost always came in owing more on their trades then they were worth, put down very little cash and were close to being financially strapped. From a financial perspective these deals were hard to close, not because the buyer was picky but rather because their finances were a mess. Fully half, and probably more, we had to switch from the car they initially wanted down to a much cheaper version or try to convert to a lease because it was the only way the bank would loan the money. We called them \"\"$30,000 millionaires\"\" because they didn't make a whole lot but tried to look like they did. As a salesman you knew you were in serious trouble when they didn't even try to negotiate. Around 2% of the deals I did were actual cash deals - meaning honest cash, not those who came in with a pre-approved loan from a bank. These were invariably for used cars about 3 to 4 years old and they never had a trade in. The people doing this always looked comfortable but never dressed up, you wouldn't even look at them twice. The negotiations were hard because they knew exactly how much that car should go for and wouldn't even pay that. It was obvious they knew the value of money. That said, I've been in the top 3% of wage earners for about 20 years and at no point have I considered myself in a position to \"\"afford\"\" a new \"\"luxury\"\" car. IMHO, there are far more important things you can do with that kind of money.\"", "title": "" }, { "docid": "e136cafcae837d65d87c1e9fd27b5988", "text": "You can negotiate a no penalty for early payment loan with dealerships sometimes. Dealerships will often give you a better price on the car when you finance through them vs paying cash, so you negotiate in a 48 month finance, after you've settled on the price THEN you negotiate the no penalty for early payment point. They'll be less likely to try to raise the price after you've already come to an agreement. My dad has SAID he does this when buying cars, but that could just be hearsay and bravado. Has said he will negotiate on the basis of a long term lease, nail down a price then throw that clause in, then pay the car off in the first payment. Disclaimer: it's...um not a great way to do business though if you plan to purchase a new car every 2-3 years from the same dealer. Do it once and you'll have a note in their CRM not to either a) offer price reductions for financing or b) offer no penalty early payment financing.", "title": "" }, { "docid": "8d3eef26be24ff71bbe382f829bf25fe", "text": "If you buy a new car, the odds that it will require repairs are fairly low, and if it does, they should be covered by the warranty. If you buy a used car, there is a fair chance that it will need some sort of repairs, and there probably is no warranty. But think about how much repairs are likely to cost. A new car these days costs like $25,000 or more. You can find reasonably decent used cars for a few thousand dollars. Say you bought a used car for $2,000. Is it likely that it will need $23,000 in repairs? No way. Even if you had to make thousands of dollars worth of repairs to the used car, it would almost certainly be cheaper than buying a new car. I've bought three used vehicles in the last few years, one for me, one for my son, and one for my daughter. I paid, let's see, I think between $4,000 and $6,000 each. We've had my son's car for about 9 months and to date had $40 in repairs. My daughter's car turned out to have a bunch of problems; I ended up putting maybe another $2,000 into it. But now she's got a car she's very happy with that cost me maybe $6,000 between purchase and repairs, still way less than a new car. My pickup had big time problems, including needing a new transmission and a new engine. I've put, hmm, maybe $7,000 into it. It's definitely debatable if it was worth replacing the engine. But even at all that, if I had bought that truck new it would have cost over $30,000. Presumably if I bought new I would have had a nicer vehicle and I could have gotten exactly the options I wanted, so I'm not entirely happy with how this one turned out, but I still saved money by buying used. Here's what I do when I buy a used car: I go into it expecting that there will be repairs. Depending on the age and condition of the car, I plan on about $1000 within the first few months, probably another $1000 stretched out over the next year or so. I plan for this both financially and emotionally. By financially I mean that I have money set aside for repairs or have available credit or one way or another have planned for it in my budget. By emotionally I mean, I have told myself that I expect there to be problems, so I don't get all upset when there are and start screaming and crying about how I was ripped off. When you buy a used car, take it for granted that there will be problems, but you're still saving money over buying new. Sure, it's painful when the repair bills hit. But if you buy a new car, you'll have a monthly loan payment EVERY MONTH. Oh, and if you have a little mechanical aptitude and can do at least some of the maintenance yourself, the savings are bigger. Bear in mind that while you are saving money, you are paying for it in uncertainty and aggravation. With a new car, you can be reasonably confidant that it will indeed start and get you to work each day. With a used car, there's a much bigger chance that it won't start or will leave you stranded. $2,000 is definitely the low end, and you say that that would leave you no reserve for repairs. I don't know where you live or what used cars prices are like in your area. Where I live, in Michigan, you can get a pretty decent used car for about $5,000. If I were you I'd at least look into whether I could get a loan for $4,000 or $5,000 to maybe get a better used car. Of course that all depends on how much money you will be making and what your other expenses are. When you're a little richer and better established, then if a shiny new car is important to you, you can do that. Me, I'm 56 years old, I've bought new cars and I've bought used cars and I've concluded that having a fancy new car just isn't something that I care about, so these days I buy used.", "title": "" }, { "docid": "09f617a19b176a24cbf9aba7eb01e74a", "text": "Another bit of advice specific to your scenario. Consider buying an ALMOST new car. Buying last year's model can knock a huge amount off the price and the car is going to still feel very new to you, especially if you buy from a dealer who has had it detailed.", "title": "" }, { "docid": "f2d1c0c043e6c0d127ce9c0d8d2b9b31", "text": "Any way you look at it, this is a terrible idea. Cars lose value. They are a disposable item that gets used up. The more expensive the car, the more value they lose. If you spend $100,000 on a new car, in four years it will be worth less than $50,000.* That is a lot of money to lose in four years. In addition to the loss of value, you will need to buy insurance, which, for a $100,000 car, is incredible. If your heart is set on this kind of car, you should definitely save up the cash and wait to buy the car. Do not get a loan. Here is why: Your plan has you saving $1,300 a month ($16,000 a year) for 6.5 years before you will be able to buy this car. That is a lot of money for a long range goal. If you faithfully save this money that long, and at the end of the 6.5 years you still want this car, it is your money to spend as you want. You will have had a long time to reconsider your course of action, but you will have sacrificed for a long time, and you will have the money to lose. However, you may find out a year into this process that you are spending too much money saving for this car, and reconsider. If, instead, you take out a loan for this car, then by the time you decide the car was too much of a stretch financially, it will be too late. You will be upside down on the loan, and it will cost you thousands to sell the car. So go ahead and start saving. If you haven't given up before you reach your goal, you may find that in 6.5 years when it is time to write that check, you will look back at the sacrifices you have made and decide that you don't want to simply blow that money on a car. Consider a different goal. If you invest this $1300 a month and achieve 8% growth, you will be a millionaire in 23 years. * You don't need to take my word for it. Look at the car you are interested in, go to kbb.com, select the 2012 version of the car, and look up the private sale value. You'll most likely see a price that is about half of what a new one costs.", "title": "" }, { "docid": "ee6c38fd143f2637083b440ec48fbf01", "text": "I like Nathan's answer some, but am horribly curious as to why you have not made payments on a $3500 student loan? If you are wealthy enough to afford a new car, this should be paid off next week. IMHO. Above all else your financial goals should dictate if you buy a new car. What are they for you? If the goal is to build wealthy quickly then Nathan's advice may be to unfrugal for you. If your goal is to impress people with the car you drive and accumulate very little real wealth then purchasing or leasing a car should be a top priority. So to answer your question correctly one must understand your goals. For 2016, the average car payment is $479 per month. If you invested that in a decent growth stock mutual fund in 40 years you'll have around 2.6 million. However, you do need something to drive now. If you can cut your car expense to $200 per month, and save the other $279 you will still end up with about 1.5 million in that same 40 years. Personally I attempt to shoot for $200 ownership cost per car per month. Its a bit difficult as I drive a lot. Also I would not purchase a new car until my net worth exceeded 2 million. At that point my investments could mitigate the steep depreciation costs of owning a new car.", "title": "" }, { "docid": "3f2d7cb8ce82aa73b1882a63e63724e8", "text": "\"Yea but they might feel swindled and that you pulled a fast one on them, and not be as willing to give you good deals in the future. Like, as a totally non mathematical example, they have a car for $50k. They lower the price to 40k with a financing that will bring total payment to 60k. Their break even on that car is let's say 45k. The financier cuts them a commission on expected profits, of maybe 7k? They made an expected 2k on the car. But if you pay it all off asap, they may lose that commission, be 5k in the hole on the sale, and pretty upset. Even more upset if they finance in house. So when you go back to buy another car they'll say \"\"fuck this guy, we need to recoup past lost profits, don't go below 4K above break even.\"\" I'm not really 100% on how financing workings when it comes to cars but from my background in sales this is the bar I would set for a customer that made me take a loss by doing business with them if they tried to come back in the future. This doesn't take into account how car dealerships don't own their inventory, finance all of their cars and actually ARE willing to take a loss on a car just to get it off the lot some times.\"", "title": "" }, { "docid": "83f722d2f398117aafd522e4bfb3384e", "text": "I think you are making this more complicated that it has to be. In the end you will end up with a car that you paid X, and is worth Y. Your numbers are a bit hard to follow. Hopefully I got this right. I am no accountant, this is how I would figure the deal: The payments made are irrelevant. The downpayment is irrelevant as it is still a reduction in net worth. Your current car has a asset value of <29,500>. That should make anyone pause a bit. In order to get into this new car you will have to finance the shortfall on the current car (29,500), the price of the vehicle (45,300), the immediate depreciation (say 7,000). In the end you will have a car worth 38K and owe 82K. So you will have a asset value of <44,000>. Obviously a much worse situation. To do this car deal it would cost the person 14,500 of net worth the day the deal was done. As time marched on, it would be more as the reduction in debt is unlikely to keep up with the depreciation. Additionally the new car purchase screen shows a payment of $609/month if you bought the car with zero down. Except you don't have zero down, you have -29,500 down. Making the car payment higher, I estamate 1005/month with 3.5%@84 months. So rather than having a hit to your cash flow of $567 for 69 more months, you would have a payment of about $1000 for 84 months if you could obtain the interest rate of 3.5%. Those are the two things I would focus on is the reduction in net worth and the cash flow liability. I understand you are trying to get a feel for things, but there are two things that make this very unrealistic. The first is financing. It is unlikely that financing could be obtained with this deal and if it could this would be considered a sub-prime loan. However, perhaps a relative could finance the deal. Secondly, there is no way even a moderately financially responsible spouse would approve this deal. That is provided there were not sigificant assets, like a few million. If that is the case why not just write a check?", "title": "" }, { "docid": "6e81284e67aa3f687270883260414ac1", "text": "I work for an auto finance company and have performed some job related analysis looking into this as well. From what I can tell I don't think the numbers are there for a 2008 recession. The loans are smaller, the asset is already known to depreciate, and the auction market is pretty effective at cutting deficiencies even more. Something to watch out for if you are analyzing this stuff though is the influx of used cars into the market. Remember, more defaults means more repossessions which means more used cars on the market. I'm curious to see what happens with this influx of used, relatively reliable cars onto the market and how this impacts the constant pumping out of new vehicles that manufacturers are forced to meet. We've already seen scaling back by some big players. There's definitely something happening in the auto industry but I don't know what to make of it yet and I would hardly say we are looking at Great Recession 2.", "title": "" }, { "docid": "6797579e382f872edec271063c5a4793", "text": "I understand, and I'm not necessarily disagreeing; I'm just asking how we know this. It's one thing if it's a logical deduction you've made, but it's another if there's direct objective evidence. Do these statistics pertain to all car sales or just factory car sales? The car I own today is the car I've owned the longest, but it's not because I can't afford to buy another one, it's because I have absolutely no reason to. My car was made in 2000; it has 115k miles on it. I could write a long list of things that are still performing just as adequately as they did when it was new, and how aside from being somewhat less powerful it doesn't actually do anything worse than comparable new cars; I'll spare you. :) Cars in 1970 were never expected to be driven past 100k miles without major service work, including an engine and transmission overhaul. Many cars well into the late 70s didn't even come with that many digits on the odometer. The economic conditions you mention, including the astonishing transfer of wealth between classes, are not good signs and it obviously needs to be reversed or this country is going to be a really shitty place to live soon. And hell yes I believe it's affecting car sales. But I'm really not convinced it's the main reason car sales peaked 40 years ago. Housing sales only peaked a few years ago, and both markets have screwed themselves over-issuing credit, albeit in different ways. Point is, you don't need to be able to afford a car when you can get a loan practically at the push of a button; Americans don't think in terms of what something costs, they think in terms of what it costs per month. Income shrinkage has been allowed to happen because people have been allowed to spend money they don't have. I know people living paycheck-to-paycheck who spend $150 - $250 per month on just data. They also have $10k's of revolving credit card debt and, even worse, $10k's in student loans. $250 per month won't save up for a new Cadillac anytime soon, but it will put you into a Cadillac if you don't mind having spent $63k on a $38k car by the time your loan matures. (Edit: those numbers are pretty exaggerated, $250/mo. wouldn't get you a Cadillac until it was several years old. You'd still end up paying several thousand more than if you'd paid cash, though... the point is that our economy is floating on credit, and this has allowed rampant overspending and living above means in the average household). You see what I'm saying? All other factors being equal car sales should have peaked a few years ago, or at least in the late 90s during the (first?) dot com bubble. There was far more spending power out there - not income, but spending power.", "title": "" } ]	fiqa
39582de08ac8583faf5697abbcfc518d	“Convertible -debt/note/bond/debentures” which of these are the same or different?	[ { "docid": "cdb2c9e7a8162c2a1041367a9e534e2c", "text": "They all basically mean the same thing - a type of debt than can be exchanged for (converted into) equity at some point. It's only the mechanics that can be different. A convertible bond is structured just like a regular bond - it (usually) pays periodic interest and has a face value that's due at maturity. The difference is that the bond holder has the option to exchange the debt for equity at some point during the life of the bond. There can be restrictions on when that conversion is possible, and they typically define a quantity of equity (number of shares) that the bond can be converted into. If the market price of the shares goes above a price that would make the shares more valuable than the bond, it's in the best interest of the bond holder to convert. A convertible note is typically used to describe a kind of startup financing that does not pay interest or have a face value that's redeemed, but instead is redeemed for equity as part of a later financing round. Rather than specifying a specific number of shares, the bond holder receives equity at a certain discount to the rest of the market. So they both are debt instruments that can turn into equity investments, just through different mechanisms. A debenture is a fancy word for unsecured debt, and convertible debt could be used to described either structure above, so those terms could mean either type of structure.", "title": "" } ]	[ { "docid": "b573ff1763f664a030871b1be7801af5", "text": "Could be misunderstanding your context. But ev = equity + debt - cash. So don't think it makes sense for an equity holder to have an individual ev/ebitda different from the company's. Are you asking in context of valuing equity and debt from an ev/ebitda multiple?", "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": "ac7d925f057087cb08455ca02173736c", "text": "If I hold a bond then I have a debt asset. If I hold physical silver then I have a commodity asset. If I hold the stock of an individual company then I have an equity asset. Equities, commodities and debts are the three kinds of assets that a person can hold. Edit: I forgot one other kind of asset; monetary asset. If I stuff my mattress with cash (USD) I am holding a monetary asset. Short-term Treasury Bills really behave more like a monetary asset than a bond. So besides actual, physical, currency I would categorize T-bill as a monetary asset. https://www.treasurydirect.gov/indiv/products/prod_tbills_glance.htm", "title": "" }, { "docid": "bc84d9ca973aeea4e184a8ddea4f3d16", "text": "\"In theory, the term of the bond does not affect the priority. It does not matter whether a \"\"Junior Subordinated Debenture\"\" is due in one year or sixty, it is still lower priority than a \"\"Secured Note\"\". On the other hand, if the \"\"Secured Note\"\" is secured by something that is not worth as much as the note, the excess is an unsecured debt. In practice, the term of the bond has two effects: Short term debt holders are more likely to get out just before the company goes broke. Sometimes their efforts to get out are exactly what causes the company to go broke! (\"\"Commercial paper\"\" is even more fickle than banks.) All other things being equal, and depending on the terms of the loan, some bonds get priority over bonds of the same type that are issued later. For example, your first mortgage usually takes precedence over your second mortgage.\"", "title": "" }, { "docid": "33ca4957f280bfa7813dc82826943aaa", "text": "\"Mortgage is a (secured) debt, a combination of a promissory note, and a security interest providing the mortage holder a secured interest in the property. Yes, you are \"\"in debt\"\". But that depends upon whether you define the term \"\"in debt\"\" as a debt appearing on the balance sheet, or the net of assets - liabilities is less than zero, whether you have a \"\"debt\"\" expense on the income statement (budget), or whether the net of income - expenses is less than zero. One person might look at their budget, find the (monthly) mortgage payment listed, and judge that they have a debt payment, and thus are \"\"in debt\"\". Or they might look at their expenses, find they exceed their income, and judge that they are \"\"in debt\"\". Another person might look at their balance sheet, compare assets to liabilities, and only say they were \"\"in debt\"\" when their liabilities exceeded their assets. Some people view mortgage debt as \"\"good debt\"\", as they view certain debts as \"\"good\"\" and others as \"\"bad\"\". Trust me, having a high mortgage payment (higher 30% of your net income) is hard, and over 40% is bad. Consider you balance sheet and your income statement. On your balance sheet, the house appears on the \"\"asset\"\" side with an (estimated) value, while the \"\"mortgage\"\" (really, the promissory note part of the mortgage) appears on the \"\"liability\"\" side. On your income statement, your house does not appear on the income side, but the mortgage (promissory note) payment appears on the expense side. So, you clearly have both a \"\"liability\"\" with a clearly-defined value and an \"\"expense\"\" with a clearly-defined payment. But do you have an \"\"asset\"\"? According to an accountant, you have an \"\"asset\"\" and a \"\"liability\"\". But you do not have a business asset that is producing revenue (income), nor do you have a business asset that can be amortized and expensed to reduce taxable income. When we think about an asset, does the word have the connotation of some thing with value, something that produces income? Well, by that measure, a house only provides income when we rent it out, and only has value when we consider selling it. As millions of families discovered during the housing (price) collapse, when the market price of your \"\"asset\"\" falls substantially, your personal financial status can fall negative and you can be \"\"broke\"\".\"", "title": "" }, { "docid": "2b49a84cc6307004df52a8092a033866", "text": "\"You are asking multiple questions here, pieces of which may have been addressed in other questions. A bond (I'm using US Government bonds in this example, and making the 'zero risk of default' assumption) will be priced based on today's interest rate. This is true whether it's a 10% bond with 10 years left (say rates were 10% on the 30 yr bond 20 years ago) a 2% bond with 10 years, or a new 3% 10 year bond. The rate I use above is the 'coupon' rate, i.e. the amount the bond will pay each year in interest. What's the same for each bond is called the \"\"Yield to Maturity.\"\" The price adjusts, by the market, so the return over the next ten years is the same. A bond fund simply contains a mix of bonds, but in aggregate, has a yield as well as a duration, the time-and-interest-weighted maturity. When rates rise, the bond fund will drop in value based on this factor (duration). Does this begin to answer your question?\"", "title": "" }, { "docid": "141eafddbda39e17d4fc29f187dd72dc", "text": "\"The word \"\"good\"\" was used in contrast to \"\"bad\"\" but these words are misused here. There are three kinds of debt: Debt for spending. Never go into debt to buy consumables, go out for a good time, for vacations, or other purchases with no lasting financial value. Debt for depreciating assets, such as cars and sometimes things like furniture. There are those who put this in the same category as the first, but I know many people who can budget a car payment and pay it off during the life of the car. In a sense, they are renting their car and paying interest while doing so. Debt for appreciating, money-making assets. Mortgage and student loans are both often put into the good category. The house is the one purchase that, in theory, provides an immediate return. You know what it saves you on the rent. You know what it costs you, after tax. If someone pays 20% of their income toward their fixed rate mortgage, and they'd otherwise be paying 25% to rent, and long term the house will keep up with inflation, it's not bad in the sense that they need to aggressively get rid of it. Student loans are riskier in that the return is not at all guaranteed. I think that one has to be careful not to graduate with such a loan burden that they start their life under a black cloud. Paying 10% of your income for 10 years is pretty crazy, but some are in that position. Finally, some people consider all debt as bad debt, live beneath their means to be debt free as soon as they can, and avoid borrowing money.\"", "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": "48c01e8025f37a2255ffd3c048d8b06a", "text": "Perhaps something else comes with the bond so it is a convertible security. Buffett's Negative-Interest Issues Sell Well from 2002 would be an example from more than a decade ago: Warren E. Buffett's new negative-interest bonds sold rapidly yesterday, even after the size of the offering was increased to $400 million from $250 million, with a possible offering of another $100 million to cover overallotments. The new Berkshire Hathaway securities, which were underwritten by Goldman, Sachs at the suggestion of Mr. Buffett, Berkshire's chairman and chief executive, pay 3 percent annual interest. But they are coupled with five-year warrants to buy Berkshire stock at $89,585, a 15 percent premium to Berkshire's stock price Tuesday of $77,900. To maintain the warrant, an investor is required to pay 3.75 percent each year. That provides a net negative rate of 0.75 percent.", "title": "" }, { "docid": "138dffcbb14d51c140e77c76bd629783", "text": "The 1 month and 1 year columns show the percentage change over that period. Coupon (coupon rate) is the amount of interest paid on the bond each period (as specified on the coupon itself. Price is the normalised price of the bond; the price of taking a position of $100 worth of the principal in the bond. Yield is the interest rate that you would receive by buying at that price (this is the inverse of the price). The time is the time of the quote presented.", "title": "" }, { "docid": "143c8924071160f71f9e1bd71c72159c", "text": "Two parties will agree to pay each other's interest obligations. This is generally for one of two reasons: * One party wishes to swap a fixed interest rate (eg coupons on a bond) for a floating interest rate (eg: payments on a loan). If their counterparty wishes the opposite, and the rates are acceptable to both, they will agree to swap their obligations * There are two firms, based in countries A and B. Each firm has a branch in the other's country, and these branches each have a loan, denominated in that other countries currency. To reduce each firm's exposure to FX risk, they can swap their obligations, so A will pay interest on B's loan (which is in A's currency) and B on A's loan (which is in B's currency). edit: removed infuriating unterminated bracket.", "title": "" }, { "docid": "7c879be1b73cca7d13a6cc4ca5f8c222", "text": "In the strictest sense, there are bills,notes, and bonds, named when issued based on their time to maturity. Even though it's called a bond ETF it may have a duration short enough to be made of T-bills, less than a year to maturity. Simply put, for bonds, risk comes from the duration, time to maturity.", "title": "" }, { "docid": "59f54cbaa67b1798e28fbcb031da4510", "text": "\"The term \"\"stock\"\" here refers to a static number as contrasted to flows, e.g. population vs. population growth. Stock, in this context, is not at all related to an equity instrument. Yes, annual refinance costs, interest rate payments etc. are what we should be looking at when assessing debt burden. Those are flows. That was my point when cautioning against naive debt GDP comparisons. Also, keep in mind that by borrowing in it's sovereign currency, the US has an enormous amount of monetary tools to handle the debt if it ever became a problem. Greece, by comparison, is at the mercy of the ECB, so they only have fiscal levers to pull. The interest expense does not strike me as especially concerning, but I'd be happy to verify BIS or IMF reports if you would like.\"", "title": "" }, { "docid": "f974cda43eb4fee7fd6b2844f12a5fd7", "text": "\"There are normally three key factors that define different kinds of loans, these factors affect the risk that the lender takes on and so the interest rate. The interest rate on any loan is linked to market interest rates; the lender shouldn't be able to receive a higher rate of interest for lending the money at no risk, and the level of risk that the lender believes the borrower to have. The three features of a particular loan are: These reduce the risk of complete or total non-payment (default) of the principal or any missed interest payments. Taken in order: Amortising Here some of the monthly payment pays a proportion of the underlying principal of the loan. This reduces the amount outstanding and so reduces the capacity for default on the full principal as part of the principal has already been paid. Security In a secured loan there is an asset such as a car, house, boat, gold, shares etc. that has a value on resale that is held against the loan. The lender may repossess the security if the borrower defaults and recover their money that way. This also acts as a \"\"stick\"\" using the loss of property to convince the borrower that it is better to keep paying the interest. The future value of the security will be taken into account when deciding how much this reduces the interest rate. Guarantor A guarantor to a loan guarantees that the borrower will repay the loan and interest in full and, if the borrower does not fulfil that obligation, the lender is able to seek legal redress from the guarantor for the borrower's debts. Each of these reduce the risk of the loan as detailed and so reduce the interest rate. The interest rate, then, is made up of three parts; the market interest rate (m) plus the interest rate premium for the borrower's own credit worthiness (c) minus the value of the features of the loan that help to reduce risk (l). The interest rate of the loan (r) is categorised as: r = m + c - l. Credit ratings themselves are an inexact science and even when two lenders are looking at the same credit score for the same person they will give a different interest rate premium. This is mostly for business reasons, and the shape of their loan book, that are too tedious to go through here. All in all the different types of loan give flexibility at the cost of a different interest rate. If you don't want the chance of your car being repossessed you don't take a secured loan, if you have a family member who can help and doesn't mind taking on your risk take a guaranteed loan.\"", "title": "" }, { "docid": "5fbcb91f3b5b42e99a3cd31ec42b68b4", "text": "When individuals take on a loan, it's often in the form of a mortgage, right? And companies take out business loans all the time, only they might be a regular bank loan and not in the form of buying bonds, more similar to when an individual takes a loan. I was seeing through what process a firm would have to go through in order to get funding via the bond process.", "title": "" } ]	fiqa
16a4a577fc627531dd5f7f9a902d8007	Stranger in Asia wants to send me $3000 in Europe over Western Union because he “likes me”? [duplicate]	[ { "docid": "275674d1993bb7ceb51d2722c83c64e9", "text": "how are the ways he could scam me? There are hundreds of different ways the scam can progress ... broadly;", "title": "" }, { "docid": "9d329e887d7499a6cd163013dc560b17", "text": "\"The first question I have to ask is, why would your \"\"friend\"\" even be considering something so ridiculous? There are so many variations of the banking scam running around, and yet people can't seem to see them for what they are -- scams. The old saying \"\"there's no such thing as a free lunch\"\" really comes into play here. Why would anyone send you/your friend $3,000.00 just because they \"\"like you\"\"? If you can't come up with a rational answer to that question then you know what you (or your friend) should do -- walk away from any further contact with this person and never look back! Why? Well, the simple answer is, let's assume they DO send you $3,000.00 by some means. If you think there aren't strings attached then all hope is lost. This is a confidence scam, where the scammer wins your trust by doing something nobody would ever do if they were trying to defraud you. As a result, you feel like you can trust them, and that's when the games really begin. Ask yourself this -- How long do you think it will be (even assuming the money is sent) before they'll talk you into revealing little clues about yourself that allow them to develop a good picture of you? Could they be setting you up for some kind of identity theft scheme, or some other financial scam? Whatever it is, you'd better believe the returns for them far outweigh the $3,000.00 they're allegedly going to send, so in a sense, it's an investment for them in whatever they have planned for you down the road. PLEASE don't take the warnings you get about this lightly!!! Scams like this work because they always find a sucker. The fact that you're asking the question in the first place means you/your \"\"friend\"\" are giving serious thought to what was proposed, and that's nothing short of disaster if you do it. Leave it be, take the lesson for what it's worth before it costs you one red cent, and move on. I hope this helps. Good luck!\"", "title": "" }, { "docid": "aaa7691ca4e8a234d85989b338da4378", "text": "\"It can be a money laundering scheme. The stranger gives you cash for free at first, then proposes to give you more but this time asks you to \"\"spend\"\" a fraction of it (like 80%). So on his side the money comes from a legitimate source. So you do it because after all you get to keep the rest of it and it is \"\"free\"\" money. But you are now involved in something illegal. Having money for which you cannot tell the origin is also something highly suspicious. You will not pay tax on it, and the fiscal administration of your country might give you a fine. Customs might also be able to confiscate the money if they suspect it comes from an illegal source.\"", "title": "" } ]	[ { "docid": "d0bbc0508b93a37b85d8f6b39652161d", "text": "\"Money has to come from somewhere. It can't just appear. So if there is really an aunt at an agency, and she is sending checks, then she is writing checks from that company, and stealing from that company. If that is the case, then the person with whom you are in contact would be using you to launder money (hide its illegal origin) and when the aunt was caught, you would be also. If it is really being done between countries, then it might be more difficult for them to find you, but it is still illegal. However, it is also likely that your contact may be using a common scam, as described by another answerer, that of asking for money in return for a cashier's check. Although cashier's checks were designed to be \"\"safer\"\" than regular checks, in that they won't bounce, if it is a fake cashier's check, it was never worth anything in the first place. When the bank tries to claim the cash from the other bank, and finds it doesn't exist, or there is no record of that check, then the effect is similar to that of a personal check bouncing: the bank will want the money back. If you have already given a portion of that money to your contact, chances are, when your find this out, he will be long gone. I would not have anything further to do with this person. Good luck.\"", "title": "" }, { "docid": "5ce583345d3b1edc1a00356f0e5996be", "text": "This is a scam. There is no soldier, no money ... This is a story to gain sympathy and make one part with Bank account and other details so that the scammer can make away with your money.", "title": "" }, { "docid": "defacdad2fe54876438533f538acc0a1", "text": "You could find a relative in another country who has the ability to receive PayPal, and have them transfer the money to you via Western Union or Hawala.", "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": "a278186efa1880c67a343e7a64454b5f", "text": "Summary: MHRA of UK said Xu was bringing fake drugs into Europe. They had ICE from US help meet Xu in Thailand. Found out Xu's wife loved materlistic things like diamonds. They used Xu's wife's love of diamonds to lure him to the US by offering whole sale price for diamonds. Xu went. They arrested him. Charged in US. Xu had a European dealer, Gillespie, who was the one ferrying the goods to UK, and through a few things, found link and charged him. Gillespie claims it was all conspiracy to blame someone in Europe, he happen to be fall guy.", "title": "" }, { "docid": "95027669f9c35e4703223ae15a60e31e", "text": "A quick search shows that https://www.westernunion.com/de/en/send-money/start.html says they will transfer €5,000 for a cost of €2.90. Assuming you can do a transfer every week, that would be six weeks at a cost of €17.40. €17.40 is slightly less than €1,500.00. I'm sure there are more ways.", "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": "" }, { "docid": "b9ebd8659554d647404cba860998ab27", "text": "Ask your bank to recall the transfer (as if went to wrong account and you have inform the bank about it). Secondly get a police report in the country where you sent the money from and where it was sent to, and state the person's name and account details. Ethically this person should return the funding, but if he or she wants to play gangsters paradise, then you want to take police action and push your bank to take the funds back by RECALLING THE FUNDS UNDER INDEMNITY. Ask your bank to give you a copy of the message they have sent to the beneficiary's bank. Use this wording and you will have success. Contact the beneficiary bank also and give them details.", "title": "" }, { "docid": "5be2abf7ea57d91c0d4d15e22705ea53", "text": "\"Not sure about specific French laws. Assuming its not a political party receiving such donations, and it an normal individual ... General common sense answer would be; but it could very well be a generous donation from someone in the Caimans or Germany The onus would be on you to prove it is a generous donation. What is the threshold between \"\"this money looks like money-laundering\"\" and \"\"this money looks like a generous donation\"\"? There is no threshold. By default if you don't know the source; it is money-laundering. In particular: is it up to me to explain where the money comes from, or is it the sender's problem? You have to explain the source of money. That the Bank in Germany may have to do its own due-diligence is separate from your having to explain the source of funds.\"", "title": "" }, { "docid": "288d276228f14c790a00ed38f2cbcab0", "text": "Go to the police. This is fraud and is illegal. Sure, this will hurt your friend but better now then when he starts abusing of his position to fraud even more people... Original comment by Bakuriu sorry for not giving credit", "title": "" }, { "docid": "7d9579caffe876adaaec0604f08c7549", "text": "Currency exchange is rather the norm than the exception in international wire transfers, so the fact that the amount needs to be exchanged should have no impact at all. The processing time depends on the number of participating banks and their speeds. Typically, between Europe and the US, one or two business days are the norm. Sending from Other countries might involve more steps (banks) which each takes a bit of time. However, anything beyond 5 business days is not normal. Consider if there are external delays - how did you initiate the sending? Was it in person with an agent of the bank, who might have put it on a stack, and they type it in only a day later (or worse)? Or was it online, so it is in the system right away? On the receiver side, how did you/your friend check? Could there be a delay by waiting for an account statement? Finally, and that is the most common reason, were all the numbers, names, and codes absolutely correct? Even a small mismatch in name spelling might trigger the receiving bank to not allocate the money into the account. Either way, if you contact the sender bank, you will be able to make them follow up on it. They must be able to trace where they money went, and where it currently is. If it is stuck, they will be able to get it ‘unstuck’.", "title": "" }, { "docid": "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": "625b4ac57726954c615a0f324b509988", "text": "There are several red flags here. can they get my bank account info in any way from me transferring money to them? Probably yes. Almost all bank transactions are auditable, and intentionally cause a money track. This track can be followed from both sides. If they can use your bank account as if they were you, that is a bit deeper than what you are asking, but yes they (and the polish cops) can find you through that transfer. I did look up the company and didn't find any scam or complaints concerning them. Not finding scams or complains is good, but what did you find? Did you find good reviews, the company website, its register, etc, etc? How far back does the website goes (try the wayback machine) Making a cardboard front company is very easy, and if they are into identity theft the company is under some guy in guam that never heard of poland or paypal. As @Andrew said above, it is probably a scam. I'd add that this scam leverages on the how easier is to get a PayPal refund compared to a regular bank transfer. It is almost impossible to get the money back on an international transaction. Usually reverting a bank transfer requires the agreement in writing of the receiver and of both banks. As for paypal, just a dispute from the other user: You are responsible for all Reversals, Chargebacks, fees, fines, penalties and other liability incurred by PayPal, a PayPal User, or a third party caused by your use of the Services and/or arising from your breach of this Agreement. You agree to reimburse PayPal, a User, or a third party for any and all such liability. (source) Also, you might be violating the TOS: Allow your use of the Service to present to PayPal a risk of non-compliance with PayPal’s anti-money laundering, counter terrorist financing and similar regulatory obligations (including, without limitation, where we cannot verify your identity or you fail to complete the steps to lift your sending, receiving or withdrawal limit in accordance with sections 3.3, 4.1 and 6.3 or where you expose PayPal to the risk of any regulatory fines by European, US or other authorities for processing your transactions); (emphasis mine, source) So even if the PayPal transfer is not disputed, how can you be sure you are not laundering money? Are you being paid well enough to assume that risk?", "title": "" }, { "docid": "b7d9a5849f2f445daea08fec938a24c5", "text": "\"You're potentially in very deep water here. You don't know who this person is that you're dealing with. Before you'd even met him, he just gave you his banking info, seemingly without a second thought. You have no idea what the sources of his money are, so what happens if the money is stolen or otherwise illegal? If it is determined that you used any of that money, you'll be on the hook to return it, at the very least. Who knows what the legal ramifications are either? So it sounds like you began spending his money before you had any kind of written agreement in place? Doesn't that seem odd to you to have someone just so trusting as to not even ask for that? Was the source of the email about the $2500 from PayPal, or from him or his advisor? PayPal always sends you a notice directly when funds are received into your account, and even if they were going to put a temporary hold on them for whatever reason (sometimes they do that), it would still show up in your account. I would HIGHLY (can I be more emphatic?) advise you not to go anywhere NEAR his bank account until or unless you can absolutely verify who he is, where his money comes from, and what the situation is. If you start dipping into his account, whether you think you're somehow entitled to the money or not, he could cry foul and have you arrested for theft. This is a very odd situation, and for someone who says he's normally cautious and skeptical, you sure let your guard down here when you started spending his money without making any serious effort to confirm his bona fides. Just because he passes himself off as smart and the \"\"doctor type\"\" doesn't mean squat. The very best scammers can do that (ever see the movie \"\"Catch Me If You Can\"\", based on a true story?), so you have no basis for knowing he's anything at all. I am thoroughly confused as to why you'd just willfully start using his money without knowing anything about him. That's deeply disconcerting, because you've opened yourself up to a world of potential criminal and civil liability if this situation goes south. If this guy was giving you money as an investment in your business and you instead used some of that money for your own personal expenses then you could land in very serious trouble for co-mingling of funds. Even if he told you it was okay, it doesn't sound like there's anything in writing, so he could just as easily deny giving you permission to use the money that way and have you charged with embezzlement. You need to step back, take a deep breath, stop using his money, and contact a lawyer for advice. Every attorney will give you a free consultation, and you need to protect yourself here. Be careful, my friend. If this makes you suspicious then you need to listen to that voice in your head and find a way to get out of this situation.\"", "title": "" }, { "docid": "27f2ea3f06194bf4fdbfa53f7af8e376", "text": "It's the rate of return on new opportunities. The rate on existing projects isn't relevant. If you buy a bond 10 years ago when market Interest rates were 8%, and you have cash to buy another bond today, it is today's interest rates that are relevant, not the rates 10 years ago.", "title": "" } ]	fiqa
522e2fe66834ae0ebf8e6b16c938cf22	Buying a home - brokerage fee	[ { "docid": "d155ae5534d0d32f1e77521fe072f09c", "text": "\"That sounds like a particularly egregious version of exclusivity. However, the way that you could handle that is to include a \"\"contingency\"\" in your purchase agreement stating that your offer is contingent upon the seller paying the brokerage fee. The argument against this, and something your broker might use to encourage you not to do so, is that it makes your offer less attractive to the buyer. If they have two offers in hand for the same price, one with contingencies and one without, they will likely take the no-contingency offer. In my area, right now, house offers are being made without very common contingencies like a financing contingency (meaning you can back out if you can't finance the property) or an inspection contingency. So, if your market is really competitive, this may not work. One last thought is that you could also use this to negotiate with your broker. Simply say you're only sign this expecting that any offer would have such a contingency. If it's untenable in your current market, it will likely cause your broker to move on. Either way, I'd say you should push back and potentially talk to some other brokers. A good broker is worth their weight in gold, and a bad one will cost you a boat load. And if you're in Seattle, I'll introduce you to literally the best one in the world. :-)\"", "title": "" }, { "docid": "1b03246a08db52042f9433dcd7ce3d62", "text": "\"Every situation is possible, it depends on what the contract states. According to Nolo: Your ability to withdraw from a home purchase depends on two things: 1) the exact point at which you are \"\"in contract\"\" to buy the house, and 2) after you're in contract, what the contract says about terminating the transaction. Therefore, you need to be 100% ready for anything to happen. After you sign the contract, it is binding and you must adhere to what the contract states. Buying a home is a big purchase - arguably the biggest of your life - you need to be comfortable with every aspect of this experience.\"", "title": "" }, { "docid": "699083d44a8467e0807cd0d675c919a8", "text": "\"I feel like you didn't actually read your agent's agreement, which should say where the money actually comes from. You sign it so that your agent can get paid by the listing agency from the net brokerage fees which the buyer pays. In the United States, \"\"real estate agents are prohibited from being paid a commission directly by the consumer.\"\" (citation: https://www.thebalance.com/how-do-buyer-s-agents-get-paid-1798872 ) The agreement will say exactly where your buyer's-agent's money is going to come from. Typically the listing agency receives the broker fees from the seller, and then pays both the seller's agent and the buyer's agent from that. It means both agents have to split the fee. [If] for some reason the seller won't pay the buyer broker, can I just not purchase the house? Pretty much, yes, though it won't be you saying \"\"deal's off\"\". Unless they have some really unusual contracts with their OWN broker, if the seller refuses to pay fees, their own side of the transaction is going to fall apart and the sale won't happen at all, leaving you off the hook for your own broker's fee.\"", "title": "" } ]	[ { "docid": "747cc718e1016927fc48bf0216b35c05", "text": "As others have said, it depends on the brokerage firm. My broker is Scottrade. With Scottrade the commission is assessed and applied the moment the order is filled. If I buy 100 shares of XYZ at $10 a share then Scottrade will immediately deduct $1007.02 out of my account. They add the commission and fees to the buy transaction. On a sale transaction they subtract the commission and fees from the resulting money. So if I sell 100 shares of XYZ at $11 a share I will get 1,092.98 put into my account, which I can use three business days later.", "title": "" }, { "docid": "3862e880f4ef2433c90221a639b0914e", "text": "The brokerage executes the transactions you tell them to make on your behalf. Other than acting as your agent for those, and maintaining your account, and charging a fee for the service, they have no involvement -- they do not attempt to predict optimal anything, or hold any assets themselves.", "title": "" }, { "docid": "863caebe164e5bd922034f24c3029475", "text": "\"New SEC rules also now allow brokers to collect fees on non-dividend bearing accounts as an \"\"ADR Pass-Through Fee\"\". Since BP (and BP ADR) is not currently paying dividends, this is probably going to be the case here. According to the Schwab brokerage firm, the fee is usually 1-3 cents per share. I did an EDGAR search for BP's documents and came up with too many to read through (due to the oil spill and all of it's related SEC filings) but you can start here: http://www.schwab.com/public/schwab/nn/m/q207/adr.html\"", "title": "" }, { "docid": "8ab91520c2ca608ff5b18cef8bc8bc97", "text": "\"What are reasonable administrative fees for an IRA? was recently discussed here. My answer was zero. An IRA is not an investment, it's a container representing the tax status of an account. Once you decide what to actually invest it in, you'll likely incur additional fees. Mutual funds, for instance can range from .05% per year to 2.00% or more. In your case, you are telling us you are spending 2% per year even before you decide what to invest in. The real question I'd like to see answered is \"\"what value can an advisor bring to one's retirement account to deserve a 2%/year fee?\"\" My final thought - most financial types had been suggesting that a retiree can target a 4% per year withdrawal after retiring. This rule of thumb has been debated since the lost decade of 2000-2009, and the safe number may be lower. If an advisor is taking 2% off the top, you are basically sharing half your income with him. A million dollar IRA, you get $20K, he gets $20K?\"", "title": "" }, { "docid": "a4e5e4d432355e265639b5ac35bdbe3a", "text": "\"Banks make money on load origination fees. The \"\"points\"\" you pay or closing costs are the primary benefit to the banks. A vast majority of the time risks associated with the mortgage are sold to another party. FYI, the same is true with investment banks. In general, the transaction costs (which are ignored by modern finance theory) are the main thing running the incentives for the industry.\"", "title": "" }, { "docid": "143bcb802543729b3a4d8b18656ffe00", "text": "12b1's have fallen out of favor in recent years, and are typically capped at about 0.25%. they are also usually waived and factored into the fund OER these days, too, though it depends on who your broker is. any revenue sharing shouldn't increase your fees. in my experience, there is more incentivizing for cross selling rather than revenue sharing, but in any case those would be fractions of your revenue allocated to different parties, and not additional fees.", "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": "8aca17fd7b02d385d8b2326c84fadefe", "text": "If that $6k includes points to buy down the rate, it could be a good deal, depending on the total cost of the house and the rates involved. If that's pure administrative and legal fees, that seems pretty high. I've bought a number of houses in my time and I don't think I ever paid over $2000. I refinanced my current house a year or two ago, with the same bank, and total closing costs were $500. That said, I don't know where you live, the cost of the house, etc. Might be that's normal in your area and your circumstances. But I'd shop around before just accepting it.", "title": "" }, { "docid": "a466255400ad63956a96c33886d5dda3", "text": "\"You don't \"\"deduct\"\" transaction fees, but they are included in your cost basis and proceeds, which will affect the amount of gain/loss you report. So in your example, the cost basis for each of the two lots is $15 (10$ share price plus $5 broker fee). Your proceeds for each lot are $27.50 (($302 - $5 )/2). Your gain on each lot is therefore $12.50, and you will report $12.50 in STCG and $12.50 in LTCG in the year you sold the stock (year 3). As to the other fees, in general yes they are deductible, but there are limits and exceptions, so you would need to consult a tax professional to get a correct answer in your specific situation.\"", "title": "" }, { "docid": "6bec9caf8b089c9ce554751fccbf01ad", "text": "In this case, trust the real estate agent; negotiating experience is one of the things you selected them for. Especially if they're suggesting a lower number than you expected, since they get paid on commission and so may be biased the other way. Part of their job is to look for hints about how motivated this seller is and what price they might accept, as opposed to what price they hope to get. And remember that the default assumption is that the two parties will meet in the middle somewhere, which means it's customary to offer 10% less to signal that you could probably be talked into it if they drop the price about 5%. This is like bridge-hand bidding: it's a semi-formalized system of hints about levels of interest, except with fewer conventions and less rationality. As far as the seller paying the closing costs: that's really part of the same negotiation, and doing it that way makes the discussion more complicated for the seller since they need to figure out how much more to charge you to cover this cost. If they offer, great, factor that into what you are willing to pay... but I wouldn't assume it or ask for it. Edit: Yes, unless you have engaged a Buyer's Agent (which I recommend for first-time buyers and maybe all huyers), their fiduciary duty is to the seller. But part of that duty is to make the sale happen. If the price goes too high and you walk away, neither the agent nor the seller make money. A bad agent can be as bad as a bad car salesman, sure. But if you don't like and mostly trust your agent, you are working with the wrong agent. That doesn't mean you give them every bit of information the seller might want, but it does mean you probably want to listen to their input and understand their rationalle before deciding what your own strategy will be.", "title": "" }, { "docid": "62b14dd6a2c9023faba26ce0e07ea9b2", "text": "\"Before the prevalence of electronic trading, trading stocks was very costly, dropping from ~15c in the late 1970s to less than a nickel per share today. Exchange fees for liquidity takers are ~0.3c per share, currently. When orders were negotiated exclusively by humans, stocks used to be quoted in fractions rather than decimal, such as $50 1/2 instead of something more precise like $50.02. That necessary ease of negotiation for humans to rapidly trade extended to trade size as well. Traders preferred to handle orders in \"\"round lots\"\", 100 shares, for ease of calculation of the total cost of the trade, so 100 shares at $50 1/2 would have a total cost of $5,050. The time for a human to calculate an \"\"odd lot\"\" of 72 shares at $50.02 would take much longer so would cost more per share, and these costs were passed on to the client. These issues have been negated by electronic trading and simply no longer exist except for obsolete brokerages. There are cost advantages for extremely large trades, well above 100 shares per trade. Brokerage fees today run the gamut: they can be as insignificant as what Interactive Brokers charges to as high as a full service broker that could charge hundreds of USD for a few thousand USD trade. With full service brokerages, the charges are frequently mystifying and quoted at the time a trade is requested. With discount brokerages, there is usually a fee per trade and a fee per share or contract. Interactive Brokers will charge a fee per share or option only and will even refund parts of the liquidity rebates exchanges provide, as close as possible to having a seat on an exchange. Even if a trader does not meet Interactive Brokers' minimum trading requirement, the monthly fee is so low that it is possible that a buy and hold investor could benefit from the de minimis trade fees. It should be noted that liquidity providing hidden orders are typically not rebated but are at least discounted. The core costs of all trades are the exchange fees which are per share or contract. Over the long run, costs charged by brokers will be in excess of charges by exchanges, and Interactive Brokers' fee schedule shows that it can be reduced to a simple markup over exchange fees. Exchanges sometimes have a fee schedule with lower charges for larger trades, but these are out of reach of the average individual.\"", "title": "" }, { "docid": "f0a6ae037fbb51b1c3c62cad032ee4ce", "text": "I'm not positive my answer is complete, but from information on my broker's website, the following fees apply to a US option trade (which I assume you're concerned with given fee in dollars and the mention of the Options Clearing Corporation): They have more detail for other countries -- see https://www.interactivebrokers.co.uk/en/index.php?f=commission&p=options1 for North America. Use the sub-menu near the top of the page to pick Europe or Asia. The brokerage-charged commission for this broker is as low as $0.25 per contract with a $1.00 minimum. Though I've been charged less than $1 to STO an options position, as well as less than $1 to BTC an options position, so not sure about that minimum. Regarding what I read as your overall underlying question (why are option fees so high), in my research this broker has one of the cheapest commission rates on options I've ever seen. When I participate in certain discussions, I'm routinely told that these fees are unbelievable and that $5.95, $7.95, or even $9.95 are considered low fees. I've heard this so much, and discussed commissions with enough people who've refused to switch brokers, that I conclude there just isn't enough competition to drive prices lower. If most people won't switch brokers to go from $9.95 to $1 per trade, there simply isn't a reason to lower rates.", "title": "" }, { "docid": "0ca7b0a68b8b52bb9fb8f2139eb24b78", "text": "\"And to answer your other questions about fees, there are a number of sites that compare brokers' fees, Google \"\"broker fee comparison\"\". I like the Motley Fool, although there are a lot of others. However, don't go just by the comparison sites, because they can be out-of-date and usually just have the basic fees. Once you find a broker that you like, go to that broker's site and get all the fees as of now. You can't sell the shares that are in your Charles Schwab account using some other broker. However, you can (possibly now, definitely eventually, see below) transfer the shares to another broker and then sell them there. But be aware that Charles Schwab might charge you a fee to transfer the shares out, which will probably be larger than the fee they'll charge you to sell the shares, unless you're selling them a few at a time. For example, I have a Charles Schwab account through my previous employer and it's $9.99 commission to sell shares, but $50 to transfer them out. Note that your fees might be different even though we're both at Charles Schwab, because employers can negotiate individual deals. There should be somewhere on the site that has a fee schedule, but if you can't find it, send them a message or call them. One final thing to be aware of, shares you get from an employer often have restrictions on sale or transfer, or negative tax consequences on sale or transfer, that shares just bought on the open market wouldn't, so make sure you investigate that before doing anything with the shares.\"", "title": "" }, { "docid": "70dd94ebee52e6a3aa1787f229346ce8", "text": "\"AFAIK, It's also possible that the ETF company is paying Ameritrade for every trade you make. Even if your brokerage doesn't make you pay a fee to trade ETFs, the company that created and runs the ETF is still making money when you purchase and use their ETFs. See \"\"What motivates each player?\"\" at Yahoo Finance.\"", "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": "" } ]	fiqa
d3a592d2ed2cb6a9dfba800014178a22	Buying a house, how much should my down payment be?	[ { "docid": "b1d662b8c52df021205c3ee3346a9c52", "text": "\"I'm going to answer your questions out of order. Emergency fund: Depending on how conservative you are and how much insurance you have, you may want anywhere from 3-12 months of your expenses on hand. I like to keep 6 months worth liquid in a \"\"high-yield\"\" savings account. For your current expenses that would be $24k, but when this transaction completes, you will have a mortgage payment (which usually includes home-owners insurance and property taxes in addition to your other expenses) so a conservative guess might be an additional $3k/month, or a total of $42k for six months of expenses. So $40-$100k for an emergency fund depending on how conservative you are personally. Down payment: You should pay no less than 20% down ($150k) on a loan that size, particularly since you can afford it. My own philosophy is to pay as much as I can and pay the loan off as soon as possible, but there are valid reasons not to do that. If you can get a higher rate of return from that money invested elsewhere you may wish to keep a mortgage longer and invest the other money elsewhere. Mortgage term: A 15-year loan will generally get you the best interest rate available. If you paid $400k down, financing $350k at a 3.5% rate, your payment would be about $2500 on a 15-year loan. That doesn't include property taxes and home-owners insurance, but without knowing precisely where you live, I have no idea whether those would keep you inside the $3000 of additional monthly home expenses I mentioned above when discussing the emergency fund. That's how I would divide it up. I'd also pay more than the $2500 toward the mortgage if I could afford to, though I've always made that decision on a monthly basis when drawing up the budget for the next month.\"", "title": "" }, { "docid": "f6a9e83f6e8a21d73dc388f11ca3632c", "text": "Mortgage qualification is typically done based on pretax income. To keep the math easy, let's assume $10K/month gross. A well written loan allows 28% or $2800 to be used for the mortgage and property tax. Property tax varies, but 1% is the average of the 2 states mentioned. This results in $7500/yr property or $625/mo tax leaving $2175/mo. Note here - OP stated $750K house. $2175 will finance $450K at 4%/30 years. $2175 will finance $300K at 3.5% /15years. Let me pause here. Facts are most important to make these decisions. Unless you're clear on gross income, which may be higher, the constraints above quickly come into play. Once the numbers are spelled out, you may find that you are qualified to only borrow $350K based on a 30 year note. Nathan's $2500 payment was correct, but for the mortgage only. Add property tax and you'd be at $3125. You'd need a gross $11,160/mo. to meet the 28% rule. The above discussion would render any further thoughts (of mine) moot.", "title": "" }, { "docid": "4e22f6e1009285612eebc28166d5956d", "text": "As observed, there is no answer that will fit all, but below are some considerations: Your monthly requirement is 5000, so you have 3000 left to pay the monthly instalments (EMI). However, if you do pay 3000, you will have no money left for any other activities (holidays etc.) till your EMI is finished Set off a sum, let us say 500-1000, per month (you shall have to decide), for other expenses The rest of the money, in this case 2000-2500, you can pay as monthly EMI If you indicate that your monthly EMI to the bank, they will be able to tell you how much of loan you are eligible for and for how long the EMI would last. This is your benchmark If this loan amount is 750,000 or more, you do not need to put in your own money. So the decision then becomes how fast you want to pay off your loan and as accordingly you shall utilize your 500,000 However, if the EMI will not cover a loan of 750,000 (more likely case), you have options between the following: a. Max out on your loan that 2000-2500 EMI/month (in terms of years as well as amount) can get you and put the rest from 500,000. b. Min your loan in terms of amount and time and put your entire 500,000 c. The middle ground is to balance between the loan and your own money, which is the best approach, there is no figure here that works for all, you have to take the decision based on your circumstances. However, in general, the shorter the loan term (in years) better it is as in aggregate you pay less money to the bank. If you are 1-2 months away from buying the house, one exercise you could do is to keep the EMI money in a separate bank account and see how you fare with the residual cash, this would give you a good reality check. Hope this helps, thanks", "title": "" }, { "docid": "cabd6507f50414dfaa6ef94b564f4d3a", "text": "\"The reason to put more money down or accept a shorter maximum term is because the bank sweetens the deal (or fails to sour it in some fashion). For example, typically, if there is less than 20% down, you have to pay an premium called \"\"Private Mortgage Insurance\"\", which makes it bad deal. But I see banks offering the same rate for a 15%-year mortgage as for a 30-year one, and I think: fools and their money. Take the 30-year and, if you feel like it pay more every month. Although why you would feel like it, I don't know, since it's very difficult to get that money back if you need it.\"", "title": "" }, { "docid": "c47f234affebd290a287b5aa59f0de7f", "text": "How much should my down payment be? Ideally 20% of the purchase price because with 20% of the purchase price, you don't have to pay a costly private mortgage insurance (PMI). If you don't have 20% down and come across a good property to purchase, it is still a good idea to go forward with purchasing with what you are comfortable with, because renting long term is generally never a good idea if you want to build wealth and become financially independent. How much should I keep in my emergency fund? People say 3-12 months of living expenses. Keep in mind though, in most cases, if you lose your job, you are entitled to unemployment benefits from the government. How long should my mortgage be? 30 year amortization is the best. You can always opt to pay more each month. But having that leverage with a 30 year loan can allow you to invest your savings in other opportunities, which can yield more than mortgage interest. Best of luck!", "title": "" } ]	[ { "docid": "fc667cc46903d9bf2c8fd48ffd853d9e", "text": "\"I'll start by focussing on the numbers. I highly recommend you get comfortable with spreadsheets to do these calculations on your own. I assume a $200K loan, the mortgage for a $250K house. Scale this up or down as appropriate. For the rate, I used the current US average for the 30 and 15 year fixed loans. You can see 2 things. First, even with that lower rate to go 15 years, the payment required is 51% higher than with the 30. I'll get back to that. Second, to pay the 30 at 15 years, you'd need an extra $73. Because now you are paying at a 15 year pace, but with a 30 year rate. This is $876/yr to keep that flexibility. These are the numbers. There are 2 camps in viewing the longer term debt. There are those who view debt as evil, the $900/mo payment would keep them up at night until it's gone, and they would prefer to have zero debt regardless of the lifestyle choices they'd need to make or the alternative uses of that money. To them, it's not your house as long as you have a mortgage. (But they're ok with the local tax assessor having a statutory lien and his hand out every quarter.) The flip side are those who will say this is the cheapest money you'll ever see, and you should have as large a mortgage as you can, for as long as you can. Treat the interest like rent, and invest your money. My own view is more in the middle. Look at your situation. I'd prioritize In my opinion, it makes little sense to focus on the mortgage unless and until the first 5 items above are in place. The extra $459 to go to 15? If it's not stealing from those other items or making your cash flow tight, go for it. Keep one subtle point in mind, risk is like matter and energy, it's not created or destroyed but just moved around. Those who offer the cliche \"\"debt creates risk\"\" are correct, but the risk is not yours, it's the lender's. Looking at your own finances, liquidity is important. You can take the 15 year mortgage, and 10 years in, lose your job. The bank still wants its payments every month. Even if you had no mortgage, the tax collector is still there. To keep your risk low, you want a safety net that will cover you between jobs, illness, new babies being born, etc. I've gone head to head with people insisting on prioritizing the mortgage payoff ahead of the matched 401(k) deposit. Funny, they'd prefer to owe $75K less, while that $75K could have been deposited pretax (so $100K, for those in the 25% bracket) and matched, to $200K. Don't make that mistake.\"", "title": "" }, { "docid": "131dd4b5ab278fb180995c846a2cc23e", "text": "Good answer, I'm painfully aware of how much money that is for how long, but I think we're getting the runaround here. We're going to find a way to reduce that rate and increase our down payment. It's the only way I see of getting myself into a house", "title": "" }, { "docid": "4868ceb88a6bd253ef1d6e26028246ad", "text": "I'm confused why you think you need a $450k house. That seems extremely high in today's market except perhaps in certain major urban locations. If you're going to live in suburbia or a smaller town/city, you should be able to find a nice 3br house for well under $300k. Before you rule out buying a house, I'd spend some time researching the real estate listings in your area, foreclosures, properties owned by bankruptcy court, etc. - you might be surprised to find a great home for as low as $150-200k. Of course if you live in a place where what I'm saying is completely off-base, please disregard my answer.", "title": "" }, { "docid": "1ae3cb543558e6c150f706998416094c", "text": "You want to buy a house for $150,000. It may be possible to do this with $10,000 and a 3.5% downpayment, but it would be a lot better to have $40,000 and make a 20% downpayment. That would give you a cushion in case house prices fall, and there are often advantages to a 20% downpayment (lower rate; less mandatory insurance). You have an income of $35,000 and expenses of $23,000 (if you are careful with the money--what if you aren't?). You should have savings of either $17,500 or $11,500 in case of emergencies. Perhaps you simply weren't mentioning that. Note that you also need at least $137 * 26 = $3562 more to cover mortgage payments, so $15,062 by the expenses standard. This is in addition to the $40,000 for downpayment and closing costs. What do you plan to do if there is a problem with the new house, e.g. you need a new roof? Or smaller expenses like a new furnace or appliance? A plumbing problem? Damages from a storm? What if the tenants' teenage child has a party and trashes the place? What if your tenants stop paying rent but refuse to move out, trashing the place while being evicted? Your emergency savings need to be able to cover those situations. You checked comps (comparable properties). Great! But notice that you are looking at a one bathroom property for $150,000 and comparing to $180,000 houses. Consider that you may not get the $235 for that house, which is cheaper. Perhaps the rent for that house will only be $195 or less, because one bathroom doesn't really support three bedrooms of people. While real estate can be part of a portfolio, balance would suggest that much more of your portfolio be in things like stocks and bonds. What are you doing for retirement? Are you maxing out any tax-advantaged options that you have available? It might be better to do that before entering the real estate market. I am a 23 year old Australian man with a degree in computer science and a steady job from home working as a web developer. I'm a bit unclear on this. What makes the job steady? Is it employment with a large company? Are you self-employed with what has been a steady flow of customers? Regardless of which it is, consider the possibility of a recession. The company can lay you off (presumably you are at the bottom of the seniority). The new customers may be reluctant to start new projects while their cash flow is restrained. And your tenants may move out. At the same time. What will you do then? A mortgage is an obligation. You have to pay it regardless. While currently flush, are you the kind of flush that can weather a major setback? I would feel a lot better about an investment like this if you had $600,000 in savings and were using this as a complementary investment to broaden your portfolio. Even if you had $60,000 in savings and would still have substantial savings after the purchase. This feels more like you are trying to maximize your purchase. Money burning a hole in your pocket and trying to escape. It would be a lot safer to stick to securities. The worst that happens there is that you lose your investment (and it's more likely that the value will be reduced but recover). With mortgages, you can lose your entire investment and then some. Yes, the price may recover, but it may do so after the bank forecloses on the mortgage.", "title": "" }, { "docid": "ad9c8354dd526a1f94c6ca1f2ff3a52c", "text": "A bigger down payment is good, because it insulates you from the swings in the real estate market. If you get FHA loan with 3% down and end up being forced to move during a down market, you'll be in a real bind, as you'll need to scrape up some cash or borrow funds to get out of your mortgage.", "title": "" }, { "docid": "a343aab16364936d534a6a452b22d73d", "text": "\"To buy a house, you need: At least 2 years tax returns (shows a steady income history; even if you're making 50k right now, you probably weren't when you were 16, and you might not be when you're 20; as they say, easy come, easy go). A 20% down payment. These days, that easily means writing a $50k check. You make $50k a year, great, but try this math: how long will it take you to save 100% of your annual salary? If you're saving 15% of your income (which puts you above many Americans), it'll still take 7 years. So no house for you for 7 years. While your attitude of \"\"I've got the money, so why not\"\" is certainly acceptable, the reality is that you don't have a lot of financial experience yet. There could easily be lean times ahead when you aren't making much (many people since 2008 have gone 18 months or more without any income at all). Save as much money as possible. Once you get $10k in a liquid savings account, speak to a CPA or an investment advisor at your local bank to set up tax deferred accounts such as an IRA. And don't wait to start investing; starting now versus waiting until you're 25 could mean a 100% difference in your net worth at any given time (that's not just a random number, either; an additional 7 years compounding time could literally mean another doubling of your worth).\"", "title": "" }, { "docid": "44aaaaed94c2fcc169b1218230d3f12f", "text": "Keep in mind, this is a matter of preference, and the answers here are going to give you a look at the choices and the member's view on the positive/negative for each one. My opinion is to put 20% down (to avoid PMI) if the bank will lend you the full 80%. Then, buy the house, move in, and furnish it. Keep track of your spending for 2 years minimum. It's the anti-budget. Not a list of constraints you have for each category of spending, but a rear-view mirror of what you spend. This will help tell you if, in the new house, you are still saving well beyond that 401(k) and other retirement accounts, or dipping into that large reserve. At that point, start to think about where kids fit into your plans. People in million dollar homes tend to have child care that's 3-5x the cost the middle class has. (Disclosure - 10 years ago, our's cost $30K/year). Today, your rate will be about 4%, and federal marginal tax rate of 25%+, meaning a real cost of 3%. Just under the long term inflation rate, 3.2% over the last 100 years. I am 53, and for my childhood right through college, the daily passbook rate was 5%. Long term government debt is also at a record low level. This is the chart for 30 year bonds. I'd also suggest you get an understanding of the long term stock market return. Long term, 10%, but with periods as long as 10 years where the return can be negative. Once you are at that point, 2-3 years in the house, you can look at the pile of cash, and have 3 choices. We are in interesting times right now. For much of my life I'd have said the potential positive return wasn't worth the risk, but then the mortgage rate was well above 6-7%. Very different today.", "title": "" }, { "docid": "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": "f4c7855baaae2b066a743a6c78dff032", "text": "First, let me say that you have to take everything your agent says with a grain of salt. Freakonomics had a great article that discussed the math behind the motivation of the real estate agent. It described the home seller, trying to get, say $400K. On a 6% commission, the $24K is destined to be split between seller realtor office and buyer's realtor's office. The selling agent gets $6,000 (or so) in the end. As a seller, if I settle for $380K, my realtor is only out $300, netting $5700. But $20K lower sale price, and I just lost nearly $19K after commission is paid. The agent would have the natural goal of volume, not extracting the last dollar from the buyer. Gaining back the last $20K to the seller will cost the realtor far more than $300 in her time, keeping the house on the market and waiting for the better offer. Sellers might use down payment as one way to estimate the probability of the financing falling through, but it's a rough estimate at best because, in the case of bank financing, the bank needs the same time to run through the paperwork for a 3% down or a 20% down. It's just as easy for the buyer to qualify or not qualify for one loan or the other. There are young couples with great incomes and no debt, who blow away the required ratios for proposed debt to income, but haven't saved up the otherwise huge 20% downpayment. Then there are those who have saved for years, even having 30% to put down, but their income is still not going to qualify them. The offer will be contingent on the financing, regardless. It will show that you are putting $XX dollars as a downpayment, and the final transaction is contingent on your bank approving you.", "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": "79ecf644625863c23f86774ee6e00f66", "text": "\"When I was 23, the Toronto housing market was approaching a record high, and I thought, \"\"I must buy a place or I'll be locked out.\"\" And I did. Bad decision. I should have waited and saved my money. For the record, I thought I would never recover, but I did. Patience grasshopper. In actual fact the U.K. housing market is probably approaching a low, and you have a job that is paying you well enough. BUT the lesson I learned wasn't about buying at a high or a low, it was about the need never to let external factors rush your decision making. Your decisions have to make sense for your own unique situation. If you're living at home and you have domestic bliss, mum and dad aren't crimping your style (if you know what I mean), then, enjoy it. Your credit balance sounds understandable. It's not fatal. But it's a budget killer. Make adjustments (somehow/anyhow) so that you are paying it down month by month. Take it down to £0. You will feel amazing once you do it. After that, use the money that you were paying onto your credit card and start saving it. Whether you ultimately use the money for a house down-payment or your retirement, doesn't matter. Just get into the situation where you're saving.\"", "title": "" }, { "docid": "51a945666e112a094863866b84cd5a21", "text": "There are several factors that you need to consider: If you have already decided on the house. Did you prequalify for the mortgage loan - If so, did you lock in the rate. If you have not already done than your research is still valid. Consider two calculators first - Affordability + Mortgage calculator Advice : If you can afford to pay 20% down then please do, Lesser monthly mortgage payment, you can save approx 400 $ per month, the above calculator will give you an exact idea. If you can afford go for 15 years loan - Lower interest rate over 2-5 years period. Do not assume the average ROI will + 8-10%. It all depends on market and has variable factors like city, area and demand. In terms of Income your interest payment is Tax deductible at the end of the year.", "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": "b33d90ed50b9465c8401b318e3e86ff2", "text": "\"The typical down-payment was expected to be 20%. The idea being that if one could not save 1/5 of the cost of a house, they were not responsible enough to ensure repayment of the loan. It is hard to say whether this is truly a relevant measure. However, in the absence of other data points, it is pretty decent. It typically requires a fair amount of time to amass that much money and it does demonstrate some restraint. (e.g. it is easily the cost of a decent new car or some other shiny \"\"toy.\"\") Income is not necessarily a good measure, on its own. I am certainly more responsible with my spending when I have less money to spend. (Lately, I have been feeling like my father, scrutinizing every single purchase down to the penny.)\"", "title": "" }, { "docid": "bd4f93a1d7ad2601e1dd0ef443ae9d42", "text": "I think anything from 10% on demonstrates a reasonable ability to save. I would consider ongoing debt level a better indicator than the size of the down payment. It's been my experience that, without exception, there is a direct correlation between a persons use of revolving credit and their ability to manage their money & control their spending. Living in Seattle, I only put 10% down on my first house, but not only have we never missed a payment we have always paid extra and now have about 50% equity after 10 years with a family. Yet it would have taken me another year to save the other 10% during which time I would have burned that amount and 1/2 again in useless rent.", "title": "" } ]	fiqa
0912ef511b3d1af8c10f0509d9eb8f2e	How can this be enough to fund a scholarship in perpetuity?	[ { "docid": "c4ec080f48901e5d1591782ca087bcba", "text": "The Trinity study looked at 'safe' withdrawal rates from retirement portfolios. They found it was safe to withdraw 4% of a portfolio consisting of stocks and bonds. I cannot immediately find exactly what specific investment allocations they used, but note that they found a portfolio consisting largely of stocks would allow for the withdrawal of 3% - 4% and still keep up with inflation. In this case, if you are able to fund $30,000, the study claims it would be safe to withdraw $900 - $1200 a year (that is, pay out as scholarships) while allowing the scholarship to grow sufficiently to cover inflation, and that this should work in perpetuity. My guess is that they invest such scholarship funds in a fairly aggressive portfolio. Most likely, they choose something along these lines: 70 - 80% stocks and 20 - 30% bonds. This is probably more risky than you'd want to take, but should give higher returns than a more conservative portfolio of perhaps 50 - 60% stocks, 40 - 50% bonds, over the long term. Just a regular, interest-bearing savings account isn't going to be enough. They almost never even keep up with inflation. Yes, if the stock market or the bond market takes a hit, the investment will suffer. But over the long term, it should more than recover the lost capital. Such scholarships care far more about the very long term and can weather a few years of bad returns. This is roughly similar to retirement planning. If you expect to be retired for, say, 10 years, you won't worry too much about pulling out your retirement funds. But it's quite possible to retire early (say, at 40) and plan for an infinite retirement. You just need a lot more money to do so. $3 million, invested appropriately, should allow you to pull out approximately $90,000 a year (adjusted upward for inflation) forever. I leave the specifics of how to come up with $3 million as an exercise for the reader. :) As an aside, there's a Memorial and Traffic Safety Fund which (kindly and gently) solicited a $10,000 donation after my wife was killed in a motor vehicle accident. That would have provided annual donations in her name, in perpetuity. This shows you don't need $30,000 to set up a scholarship or a fund. I chose to go another way, but it was an option I seriously considered. Edit: The Trinity study actually only looked at a 30 year withdrawal period. So long as the investment wasn't exhausted within 30 years, it was considered a success. The Trinity study has also been criticised when it comes to retirement. Nevertheless, there's some withdrawal rate at which point your investment is expected to last forever. It just may be slightly smaller than 3-4% per year.", "title": "" }, { "docid": "71416857365a4d4aa2f956807b17fbf4", "text": "Some historical and mathematical insights as a complement to existing answers. History. I found it astonishing that already in Ancient Roman they investigated the issue of perpetuity of 30'000 (almost). Columella writes in De re rustica (3, 3, 7–11.) in 1-st century AD about a perpetuity of 32480 sesterces principal under 6% p.a. resulting in 1950 sesterces annual payment. And if the husbandman would enter this amount as a debt against his vineyards just as a moneylender does with a debtor, so that the owner may realize the aforementioned six per cent. interest on that total as a perpetual annuity, he should take in 1950 sesterces every year. By this reckoning the return on seven iugerum, even according to the opinion of Graecinus, exceeds the interest on 32'480 sesterces. Math. If we fix a scholarship at 1'000 a year, then it's clear that it could be paid out infinitely if we could achieve 3.33% p.a. on it. On the other side, with 0% we'll spend out the endowment in 30 years. Thus, having the interest rate between 0% and 3.33% p.a. we could vary the life of endowment between 30 years and infinity. Just a few numbers in between: under 1%, it would be ~36 years, under 2% ~46 years, under 3% ~78 years (however, 1000$ in 78 years could be less than 10$ today). Conclusion: to keep it perpetual either the fund's yield must be at the level of scholarship, or re-adjust the amount of scholarship depending on fund achievement, or redefine the notion of perpetuity (like 50 years is approximately infinite for our purpose).", "title": "" }, { "docid": "9847e66640bcf30db81505f3092a1c1f", "text": "\"What's the value of the scholarship, and is it administered by itself or by the university? If by itself, the financial return discussed above drives. If by the university, they create the tuition, so it gets more interesting. If this is something that is administered and backstopped by the university, then keep in mind that while it may be named the \"\"John Doe Memorial Scholarship\"\" with $30000 in it's account under the endowment, the university overall is likely to cut some number of students' tuition in financial aid packages anyway. Let's say they substitute a generic tuition adjustment in past years with this happens-to-be-named \"\"John Doe Memorial Scholarship\"\" moving forward: the university can do this as long as they are not constrained in pricing power by laws and financial aid customs. There's the finance answer, and there's the fact that a university can create a \"\"coupon\"\" indefinitely (Similar in concept to the price discrimination where Proctor and Gamble can launch a new flavor of Tide at a high price to maintain the market position, and flood marketing channels with coupons) Also the university might find it to be an inexpensive benefit to the faculty to create a ceremony around a valued, deceased professor; collecting funds from other professors or staff to partially pay for it at finance price or even a slight loss.\"", "title": "" } ]	[ { "docid": "79bd1f7fa03d24bd2c00af21a84a8ba9", "text": "isn't the answer in the question? it says the company starts officially NEXT year, yet it is asking for the net present value...i.e what that project is worth today. it could be that funds for that particular project may not be necessary for another year, but there may be other projects to evaluate against today.", "title": "" }, { "docid": "79b730bea961def6987f5d292bed6251", "text": "Let P denote the amount of the investment, R the rate of return and I the rate of inflation. For simplicity, assume that the payment p is made annually right after the return has been earned. Thus, at the end if the year, the investment P has increased to P(1+R) and p is returned as the annuity payment. If I = 0, the entire return can be paid out as the payment, and thus p = PR. That is, at the end of the year, when the dust settles after the return PR has been collected and paid out as the annuity payment, P is again available at the beginning of the next year to earn return at rate R. We have P(1+R) - p = P If I > 0, then at the end of the year, after the dust settles, we cannot afford to have only P available as the investment for next year. Next year's payment must be p(1+I) and so we need a larger investment since the rate of return is fixed. How much larger? Well, if the investment at the beginning of next year is P(1+I), it will earn exactly enough additional money to pay out the increased payment for next year, and have enough left over to help towards future increases in payments. (Note that we are assuming that R > I. If R < I, a perpetuity cannot be created.) Thus, suppose that we choose p such that P(1+R) - p = P(1+I) Multiplying this equation by (1+I), we have [P(1+I)](1+R) - [p(1+I)] = P(1+I)^2 In words, at the start of next year, the investment is P(1+I) and the return less the increased payout of p(1+I) leaves an investment of P(1+I)^2 for the following year. Each year, the payment and the amount to be invested for the following year increase by a factor of (1+I). Solving P(1+R) - p = P(1+I) for p, we get p = P(R-I) as the initial perpetuity payment and the payment increases by a factor (1+I) each year. The initial investment is P and it also increases by a factor of (1+I) each year. In later years, the investment is P(1+I)^n at the start of the year, the payment is p(1+I)^n and the amount invested for the next year is P(1+I)^{n+1}. This is the same result as obtained by the OP but written in terms that I can understand, that is, without the financial jargon about discount rates, gradients, PV, FV and the like.", "title": "" }, { "docid": "f3c332fbce2b61f308b02c595062977e", "text": "Ok so this is the best information I could get! It is a guarantee from a financial institution that payment will be made for items or services once certain requirements are met. Let me know if this helps! I'll try to get more info in the meantime.", "title": "" }, { "docid": "70871e94302038a1d3b12f2603dde00f", "text": "\"It appears you can elect to classify some or all of your scholarship money as taxable. If you do this, you would be deemed to have used the scholarship funds for non-deductible purposes (e.g., room and board), and you could be eligible to claim the American opportunity credit based on the money you used to pay for the tuition out of your own pocket. I found this option in the section of Publication 970 about \"\"Coordination with Pell grants and other scholarships\"\", specifically example 3: The facts are the same as in Example 2—Scholarship excluded from income [i.e., Bill receives a $5600 scholarship and paid $5600 for tuition]. If, unlike Example 2, Bill includes $4,000 of the scholarship in income, he will be deemed to have used that amount to pay for room and board. The remaining $1,600 of the $5,600 scholarship will reduce his qualified education expenses and his adjusted qualified education expenses will be $4,000. Bill's AGI will increase to $34,000, his taxable income will increase to $24,250, and his tax before credits will increase to $3,199. Based on his adjusted qualified education expenses of $4,000, Bill would be able to claim an American opportunity tax credit of $2,500 and his tax after credits would be $699. You can only reclassify income in this way to the extent that your scholarship allows you to use that money for nonqualified expenses (such as room and board). You should carefully check the terms of the scholarship to determine whether it allows this. The brief paragraph you cite from the Palmetto fellowship document is not totally clear on this point (at least to my eye). You might want to ask the fellowship administrators if there are restrictions on how they money may be used. In addition, I would be cautious about attempting to do this unless you actually did pay for the nonqualified expenses yourself, so you can treat the money as fungible. If, for instance, your parents paid for your room and board, it's not clear whether you could legitimately claim that you used the scholarship money to pay for that, since you didn't pay for it at all (although in this case your parents could possibly be able to claim the AOC themselves). I mention this because you say in your question that you \"\"only used the scholarship for tuition and fees\"\". I'm not sure how exactly you meant that, but it seems from the example cited above that, in order to claim the scholarship as taxable income, you have to actually have nonqualified expenses which you can say you paid for with the scholarship. (Also, of course, you had to actually receive the money yourself. If the scholarship money was given directly to your school as payment of tuition, then you never had any ability to use it for anything else.)\"", "title": "" }, { "docid": "0b418207b6cf9316c2b7b5d6ebf0b31c", "text": "\"There is no simple answer to your question. It depends on many things, perhaps most notably what college your daughter ends up going to and what kind of aid you hope to receive. Your daughter will probably fill out the FAFSA as part of her financial aid application. Here is one discussion of what parental assets \"\"count\"\" towards the Expected Family Contribution on the FAFSA. You can find many similar pages by googling. Retirement accounts and primary residence are notable categories that do not count. So, if you were looking to reduce your \"\"apparent\"\" assets for aid purposes, dumping money into your mortgage or retirement account is a possibility. However, you should be cautious when doing this type of gaming, because it's not always clear exactly how it will affect financial aid. For one thing, \"\"financial aid\"\" includes both grants and loans. Everyone wants grants, but sometimes increasing your \"\"eligibility\"\" may just make you (or your daughter) eligible for larger loans, which may not be so great. Also, each college has its own system for allocating financial aid. Individual schools may ask for more detailed information (such as the CSS Profile). So strategies for minimizing your apparent assets that work for one school may not work for others. Some elite schools with large endowments have generous aid policies that allow even families with sizable incomes to pay little or nothing (e.g., Stanford waives tuition for most families with incomes under $125,000). You should probably research the financial aid policies of schools your daughter is interested in. It can be helpful to talk to financial aid advisors at colleges, as well as high school counselors, not to mention general financial advisors if you really want to start getting technical about what assets to move around. Needless to say, it all begins with talking with your daughter about her thoughts on where to go.\"", "title": "" }, { "docid": "3841186b573af2ba2dc5c2085df4e93e", "text": "\"First, don't save anything in a tax sheltered vehicle. You will be paying so little tax that there will be essentially no benefit to making the contributions, and you'll pay tax when they come out. Tax free compounding for 40 years is terrific, but start that after you're earning more than a stipend. Second, most people recommend having a month's expenses readily available for emergencies. For you, that would be $1500. If you put $100 a month aside, it will take over a year to have your emergency fund. It's easy to argue that you should pick a higher pace, so as to have your emergency money in place sooner. However, the \"\"emergencies\"\" usually cited are things like home repair, car repair, needing to replace your car, and so on. Since you are renting your home and don't have a car, these emergencies aren't going to happen to you. Ask yourself, if your home was destroyed, and you had to replace all your clothes and possessions (including furniture), how much would you need? (Keep in mind any insurance you have.) The only emergency expense I can't guess about is health costs, because I live in Canada. I would be tempted to tell you to get a credit card with a $2000 limit and consider that your emergency fund, just because grad student living is so tight to the bone (been there, and 25 years ago I had $1200 a month, so it must be harder for you now.) If you do manage to save up $1500, and you've really been pinching to do that (walking instead of taking the bus, staying on campus hungry instead of popping out to buy food) let up on yourself when you hit the target. Delaying your graduation by a few months because you're not mentally sharp due to hunger or tiredness will be a far bigger economic hit than not having saved $200 a month for 2 or 3 years. The former is 3-6 months of your new salary, the latter 5-7K. You know what you're likely to earn when you graduate, right?\"", "title": "" }, { "docid": "b434b7b7a2e750295a18e50334555552", "text": "If you have children in a university institution, then your annual salary is reported via financial aid forms. The small raise could be the difference between full tuition covered and only half tuition covered.", "title": "" }, { "docid": "4386006583bf590ccf6ce15b61c555f5", "text": "The average of a dozen good answers is close to what would be right, the wisdom of crowds. But any one answer will be skewed by one's own opinions. The question is missing too much detail. I look at $400K as $16K/yr of ongoing withdrawals. How much do you make now? When the kids are all in school full time, can your wife work? $400K seems on the low side to me, especially with 3 kids. How much have you saved for college? The $150K for your wife is also a bit low. Without a long tangent on the monetary value of the stay at home spouse, what will you spent on childcare if she passes? Term life also has a expiration date. When my daughter was born, my wife and I got 20 year term. She is now 16, her college account fully funded, and we are semi-retired. The need for insurance is over. If one of us dies, the survivor doesn't need this big of a house, and will have more than they need to be comfortable in a downsized one. My belief is that the term value should bridge the gap to the kids getting through college and the spouse getting resettled. Too much less, I'd have left my wife at risk. Too much more, she'd be better off if I were dead. (I say that half joking, the insurance company will often limit the size policy to something reasonable.)", "title": "" }, { "docid": "91387448bed5117c2724195994ae32b7", "text": "As more people earn it, the value will dilute to some degree. However, I think for some parts of finance, the charter will retain usefulness. I mean, college degrees are extremely diluted, but they're still seen as a necessary requirement. I see that happening for PM type of roles. Clearly anywhere it isn't useful now won't see appreciation in that later.", "title": "" }, { "docid": "b3d0d88450f4b4c6e9b9ff492aefca89", "text": "So what if someone gets approved for a larger credit card balance and gambles it away? There's nothing tangible left except for maybe some norepinephrine left in your system... Honestly if the student loan system dried up for anything in like Liberal Arts, universities would scramble to fill positions in their schools and maybe tuitions would come down to an affordable level. Right now it's a joke. People are willing to pay for school and living on res when they get qualified for 100k in student loans. If the student loans weren't there perhaps they'd live with their parents and work to support their education. Tuitions should fall to affordable levels if that were the case.", "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": "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": "39759f3a694b4c798f6717f6d8314396", "text": "\"This is a tricky question, because the financial aid system can create odd incentives. Good schools tend to price themselves above and beyond any reasonable middle-class ability to save and then offer financial aid, much of it in the form of internal \"\"grants\"\" or \"\"loans\"\". If you think about it, the internal grant is more of a discount than a grant since no money need have ever existed to \"\"fund\"\" the grant. The actual price to the parents is based on financial aid paperwork and related rules, perhaps forming a college price-setting cartel. It is these rules that need to be considered when creating a savings plan. Suppose it is $50k/year to send your kids to the best school admitting them. Thats $200k for the 4 years. Suppose you had $50k now to save instead of $10K, and are wondering whether to put it in your son's college savings (whether or not you can do so in a tax advantaged way) or to pay down the mortgage. If you put it in your kids savings, and the $50k becomes $75k over time, that $75k will be used up in a year and a half as the financial aid system will suck it dry first before offering you much help. On the other hand, if you put the $50k on paying down the mortgage [provided the mortgage is \"\"healthy\"\" not upside down], your house payment will still be the same when your kids go to college. The financial aid calculations will consider that the kid has no savings, and allocate a \"\"grant\"\" and some loans the first year and a parental portion that you might be able to tap with a home equity loan or work overtime. Generally, you should also be encouraging your kids to excel and perhaps obtain academic scholarships or at least obtain some great opportunities. A large college savings fund might be as counterproductive as a zero fund. They shouldn't be expecting to breeze through some party school with a nice pad and car, homework assistance, and beer money. Unless they are good at a sport, like maybe football -- in which case you won't need to be the provider. It is not obvious how much the optimal ESA amount is. It might not be $0. Saving like crazy in there probably isn't the best thing to do, either.\"", "title": "" }, { "docid": "02fc74037147deb4142ef946e110d69c", "text": "I worked at a for-profit school, one associated with Full Sail University. I can say this from experience: -Most of the people receiving stipends (loan money from federal or private sources) are black and from low-income neighborhoods. -In SOME instances the people enrolled in the school were obviously mentally ill and very likely homeless. -Most of the people receiving stipends either drop out themselves or are dropped for poor academic progress and attendance. This is after a hefty debt is built up. -The school goes to extraordinary lengths to enroll military vets. I can't say anything about admission tactics other than they check to see if you have a high school degree. Personally I would never go to these type of schools.", "title": "" }, { "docid": "57d81d7a88f068400691d7daa7e77615", "text": "I think it's interesting to look at bitcoin not as a get-rich quick scheme, but rather a tool to study socio-economics through looking how areas in developing countries view this type of model (and the entire world at large of course). The entire crypto-coin scene has a variety of different algorithms which replicate different monetary policies to promote the most value and high functioning societies. For example: dogecoin was meant as a quick laugh but has now developed into an inflation based coin to encourage high velocity through tipping. This micropayment model and friendly community hope to gain adoption through spreading it far and wide. Bitcoin looks at the properties that made gold a useful state-less trade asset and tried to adapt that to the web. It solved traditional problems which made this impossible before without a central party and thus now experiments and studies can be done. Who knows what happens. Gavin, the chief engineer of the bitcoin core development group says, > I still say that it's an experiment, and the whole thing could implode. Coming from the guy who is literally making the edits to the code, I think it's safe to take off the wary of it being used to scam people and instead look at it from a more academic light to see what could be gleaned from bitcoin to improve current institutions.", "title": "" } ]	fiqa
e8fea7f6ed2c81f1d64efe0dbf1dbdf3	Will paying off my car early hinder my ability to build credit?	[ { "docid": "02e6798c639b94b2ad34d967795f687b", "text": "Don't fuss about your credit score when you're paying 9%. Get rid of the loan as fast as you can. Period.", "title": "" }, { "docid": "2b5ce47533be35a241aa99f1f4f8fec9", "text": "No. Credit scores are primarily built by doing the following: To build credit, get a few major credit cards and a couple of store cards. Use one of them to make routine purchases like gas and groceries. Pay them on time every month. You're good to go. I would hate to sell stocks to pay off a loan -- try finding a better loan. If you financed through the dealer, try joining a credit union and see if you can get a better rate.", "title": "" }, { "docid": "06b62f2e839c4409e58c08dab7ad9f74", "text": "1) How long have you had the car? Generally, accounts that last more than a year are kept on your credit report for 7 years, while accounts that last less than a year are only kept about 2 years (IIRC - could someone correct me if that last number is wrong?). 2) Who is the financing through? If it's through a used car dealer, there's a good chance they're not even reporting it to the credit bureaus (I had this happen to me; the dealer promised he'd report the loan so it would help my credit, I made my payments on time every time, and... nothing ever showed up. It pissed me off, because another positive account on my credit report would have really helped my score). Banks and brand name dealers are more likely to report the loan. 3) What are your expected long term gains on the stocks you're considering selling, and will you have to pay capital gains on them when you do sell them? The cost of selling those stocks could possibly be higher than the gain from paying off the car, so you'll want to run the numbers for a couple different scenarios (optimistic growth, pessimistic, etc) and see if you come out ahead or not. 4) Are there prepayment penalties or costs associated with paying off the car loan early? Most reputable financiers won't include such terms (or they'll only be in effect during the first few months of the loan), but again it depends on who the loan is through. In short: it depends. I know people hate hearing answers like that, but it's true :) Hopefully though, you'll be able to sit down and look at the specifics of your situation and make an informed decision.", "title": "" }, { "docid": "ab424416dc1d8ad0e216fd37e4b0ff4a", "text": "12% is ridiculously high and routine for loans with no credit history, esp. from the dealer. I don't think though paying off would hurt your credit - you've already got installment loan on your report, and you have history of payments, so it shouldn't matter how long the history is (warning: this is kind of guesswork compiled from personal experience and stuff read on the net, since officially how credit score calculated is Top Secret). If you have the loan and credit card with good payments, only thing you need to build credit is time (and, of course, keeping everything nicely paid). Of course, if you could find a loan with lower rate somewhere it's be great to refinance but with low credit you would probably not get the best rates from anywhere, unfortunately.", "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": "d4d9b4643ff543beead589bc07cf7501", "text": "\"I think so. I am doing this with our furniture. It doesn't cost me any more money to pay right now than it will to pay over the course of 3 years, and I can earn interest on the money I didn't spend. But know this: they aren't offering 0%, they are deferring interest for 3 years. If you pay it off before then great, if you don't you will owe all the accumulated interest. The key with these is that you always pay it, and on time. Miss a payment and you get hosed. If you don't pay on time you will owe the interest that is being deferred. They will also be financing this through a third party (like a major bank) and that company is now \"\"doing business with you\"\" which means in the US they can call you and solicit new services. I am willing to deal with those trade offs though, plus, as you say, you can always pay it off. WHY THEY DO IT (what is in it for them...) A friend of mine works for a major bank that often finances these deals here is how they work. Basically, banks do this to generate leads for their divisions that do cold calls. If you are a high credit, high income customer you go to a classic bank and request cash, if you are building credit or have bad credit, you go to a \"\"financial services\"\" branch. If you tend to finance things like cars and furniture, you get more cold calls.\"", "title": "" }, { "docid": "9803f597eb3d7a5ba67d66094d3a4d74", "text": "Imagine that your normal mode of using credit gets you a score of X. As time goes by your score trends upward if the positive items (length of credit) outweigh your negative items. But there are no big increases or decrease in your score. Then you make a one time change to how you use credit. If this is a event that helps your score, there will be a increase in your score. If it is bad thing your score will drop. But if you go back to your standard method of operating your score will drift back to the previous range. Getting a car loan for a few months to get a bump in your credit score, will not sustain your score at the new level indefinitely. Overtime the impact will lessen, and the score will return your your normal range. Spending money on the loan just to buy a temporary higher credit score is throwing away money.", "title": "" }, { "docid": "4f9f5b030ba22a07c5635bb76abf7cda", "text": "The dealership is getting a kickback for having you use a particular bank to finance through. The bank assumes you will take the full term of the loan to pay back, and will hopefully be a repeat customer. This tactic isn't new, and although it maybe doesn't make sense to you, the consumer, in the long run it benefits the bank and the dealership. (They wouldn't do it otherwise. These guys have a lot of smart people running #s for them). Be sure to read the specifics of the loan contract. There may be a penalty for paying it off early. Most customers won't be able to pay that much in cash, so the bank makes a deal with the dealership to send clients their way. They will lose money on a small percentage of clients, but make more off of the rest of the clients. If there's no penalty for paying it off early, you may just want to take the financing offer and pay it off ASAP. If you truly can only finance $2500 for 6 mos, and get the full discount, then that might work as well. The bank had to set a minimum for the dealership in order to qualify as a loan that earns the discount. Sounds like that's it. Bonus Info: Here's a screenshot of Kelley Blue Book for that car. Car dealers get me riled up, always have, always will, so I like doing this kind of research for people to make sure they get the right price. Fair price range is $27,578 - $28,551. First time car buyers are a dealers dream come true. Don't let them beat you down! And here's more specific data about the Florida area relating to recent purchases:", "title": "" }, { "docid": "8785bed1c0db891da8bbb9ac28373e9d", "text": "The problem is that the reason you find out may be that you are at the car dealer, picked out a car, and getting ready to sign the loan papers with your supposedly good credit, and you are denied for late payment on loans you didn't know you have. Or debt collectors start hounding you. Or you credit card interest rates go up. Or you are charged more for your insurance because you are seen as a bad credit risk. Or you can't rent an apartment. The list is almost endless. It can takes many months and hours spent on the phone to fix these things.", "title": "" }, { "docid": "7272a66bfcb146100e122085b2ec6a24", "text": "From what I have heard on Clark Howard if you pay your balance off before the statement's closing date it will help your utilization score. He has had callers confirm this but I don't have first hand knowledge for this to be true. Also this will take two months to make the difference. So it will be boarder line if you will get the benefit in time. Sign up for credit karma if you like. You can get suggestions on how to help your score.", "title": "" }, { "docid": "6517ba1f07915102ded4d29d75dde043", "text": "If you pay it off before the cycle closes it will look like you have 100% available credit. So if you credit card statement closes on the 7th pay it off on the 6th in full don't pay it when its due 2/3 weeks later. Then after three months of doing that your credit score will go up based on the fact that your debt ratio is so low. That ratio is 30% of your credit score. It will help quite alot.", "title": "" }, { "docid": "fd92ae640d0132ad1116e6974e160e93", "text": "\"Paying off a loan early isn't a bad thing. Having a credit card for 6 months and then closing it is probably unneeded; pay it off and then keep it as an emergency card. The key is debt:available credit ratio. Look at this article for example which explains the different elements; the only one you're affecting here is the second, your debt load. If you're not planning on asking for another loan in the next six months, none of this really matters - assuming you are paying it off for sure, in six months, your debt will be gone and your credit score recovered from any hit it takes (and if you get a $1500 credit card and only put $300 on it, it might actually improve your credit). But having an open $1500 credit card with a 0 balance will probably improve your credit rating, unless you have a really high amount of available credit. It will improve your debt/credit ratio (ie, total $ you owe divided by total $ you could put on your CCs/revolving credit). This is all aside from the \"\"is it a good idea to borrow money for a 3 month vacation before starting working\"\", which the answer is \"\"Well, not exactly\"\". That's not from a credit perspective, just from a living within your means perspective. If you have a firm job that will easily pay off the vacation, it's probably not a bad thing, but definitely a certain number of people will take this and end up in 'spending bad habits' that last their life. Be aware of that, and if you're just loaning yourself money from the future, make sure you understand the terms of that loan... and are certain you can pay it off.\"", "title": "" }, { "docid": "941588d47aacbc1883e1d105c11e0b4b", "text": "\"Credit is like dignity - it takes a long time to build but a short time to lose. Your credit history is mostly made up of your prior activity for several years. There's no \"\"quick fix\"\" to raise your credit score in a short period. Paying your student loans on time will help, but it will take quite some time for that activity to make a big difference in your credit. If you can't get approved for a car loan of $15k, then perhaps it's time to either reset your expectations or save up enough to make a large down payment on a more expensive car. Instead of prepaying your student loans that are not due, save up that money for a down payment. You can get an incredibly reliable car for much less than $15,000. Also, make sure that you will be able to afford the car payment when your student loans do become due (based on your current salary, not some hypothetical future salary) Another plan: drive your car for another year, pay off your student loans in that time, and then you might have enough credit history to get a better loan.\"", "title": "" }, { "docid": "6787c5a4ece0bd9aca6d411366063770", "text": "While, from a money-saving standpoint, the obviously-right course of action is to make only the minimum payment on the 0% loan, there are potentially legal reasons to try to pay off a car loan early. With a mortgage, you are the legal owner of the property and any action by the lender beyond imposing fees (e.g. foreclosure) requires going through the proper legal channels. On the other hand, in most jurisdictions, you are not the legal owner of a car purchased on a loan, and a missed or even lost payment can result in repossession without the lender even having to go to court. So from a risk-aversion standpoint, there's something to be said for getting rid of car loans as soon as you can.", "title": "" }, { "docid": "46e0fd4a0513b1e04e20f5ec1819ed82", "text": "Sometimes I think it helps to think of the scenario in reverse. If you had a completely paid off car, would you take out a title loan (even at 0%) for a few months to put the cash in a low-interest savings account? For me, I think the risk of losing the car due to non-payment outweighs the tens of dollars I might earn.", "title": "" }, { "docid": "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": "ab26a4fd6f538c04bfc2f5b70df5e51d", "text": "Personally, I don't think that the interest from the car loan is worth the credit history you're building through it. There are other ways to build credit that don't require you to pay interest, like the credit card you mentioned (so long as you keep paying off the balance). So I'd go that route: ditch the auto loan and replace it with a line of consumer credit. Just be careful not to overspend because the card will likely have a higher interest rate than your loan.", "title": "" }, { "docid": "d9758baa2e8282051e22e60e24a3559e", "text": "\"It makes no sense to spend money unnecessarily, just for the purpose of improving your credit score. You have to stop and ask yourself the question \"\"Why do I need a good credit score?\"\" Most of the time, the answer will be \"\"so I can get a lower interest rate on (ABC loan) in the future.\"\" However, if you spend hundreds or even thousands of dollars in the present, just so that you can save a few points on a loan, you're not going to come out ahead. The car question should be considered strictly in the context of transportation expenses: \"\"It cost me $X to get around last year using Lyft. If instead I owned a car, it would have cost me $Y for gas, insurance, depreciation, parking, etc.\"\" If you come out ahead and Y < X, then buy the car. Don't jump into an expensive vehicle (which is never a good investment) or get trapped into an expensive lease which will costs you many times more than the depreciation value of a decent used car, just so that you can save a few points on a mortgage. Your best option moving forward would be to pay off your student loans first, getting rid of that interest expense. Place the remainder in savings, then start to look at a budget. Setting aside a 20% down payment on a home is considered the minimum to many people, and if that is out of reach you might need to consider other neighborhoods (less than 400K!). If you're still concerned about your credit score, a good way to build that up (once you have a budget and spending under control) is to get a credit card with no annual fees. Start putting all of your expenses on the credit card (groceries, etc), and paying off the balance IN FULL every month. By spending only what you need to within a reasonable budget, and making payments on time and in full, your credit rating will begin to gradually improve. If you have a difficult time tracking your expenses or sticking to a budget, then there is potential for danger here, as credit cards are notorious for high interest and penalties. But by keeping it under control and putting the rest toward savings, you can begin to build wealth and put yourself in a much better financial position moving into the future.\"", "title": "" }, { "docid": "e6f35098b4eace30b2e36802e1eef540", "text": "I don't agree with others regarding paying off debt ASAP. You only have auto loan and auto loans are actually good for your credit score. With a mere $6k balance, it is not like you are going to have a problem paying off the loan. Not only that you will build your credit score and this will come in handy when you are purchasing a home. With the Federal Reserve setting the interest rate at 0% until 2015, I can't understand why people would pay off anything ASAP. As long as you don't have revolving credit card balances, you are in the clear. I don't know your salary nor how big your porfolio is but I would save 5 months expense in cash and dump the rest in precious metals. Holding cash is the worst thing you could be doing (unless you predict a deflation). You said you already have 40% in precious metals. You are already way ahead of other 95% of Americans by protecting your purchasing power. Follow your gut. The stormg is coming and it's not going to get any better.", "title": "" } ]	fiqa
28ed9f8b7a7edfad18e351d97eca5a35	How can I decide whether do a masters even if I have go into debt after doing it?	[ { "docid": "52a6ddf06be78ea86054232dbf615837", "text": "What should I do? Weigh your options and decide which education investment lines up better with your goals. Some of the costs from pursuing a degree at the more reputable university may include: However there are probably some benefits to pursuing a degree at this university: You will know best which of these apply to you in addition to any pros or cons not mentioned. You need to evaluate each one in order to make a decision.", "title": "" }, { "docid": "9491a5ccc6a8d4d5090c7bcb819ab49a", "text": "Strictly from an ROI perspective, this is likely very dependent on your field. Some masters degrees (quant finance, business, engineering) will be well worth the debt, since a degree from the right university will yield a respectable ROI, whereas other degrees/fields (philosophy, fine arts, etc) will be basically a waste of money. Regardless of the field you can input your information into an ROI calculator and see what you get. I typically err on the side of using the lowest average reported salary for the degree programs you're considering (self reported salary data is notoriously inflated).", "title": "" }, { "docid": "00ad01f1dc7959a0929ec4f9921bbca2", "text": "I did some research and I found a very interesting article that had exactly my case as an example ( person has an undergrad from a nice University in the relative field and wants to do a masters to get a job in a high tech company). Here is the source. Consider “Susan:” She has an undergraduate degree from the University of Washington in Computer Science, and is considering applying to a master’s program at UW or an equivalent program. She’s hoping afterwards to land a job at a top tech company. So far, she’s only been able to get jobs with startups and smaller-name companies. A master’s degree probably wouldn’t make sense for Susan. It might help her to land a job at a top tech company, but she could also do that by working at a startup for a year or two and spending some time developing her skill set through personal projects. If she did it that way, she’d probably be a lot richer in the end.", "title": "" } ]	[ { "docid": "276f2d9f5e360c3c23e8e092a020d02c", "text": "If you know that you want that advanced degree; And there is a way to have your employer pay for some of it or all of it; And you are reasonably certain that you will not be quitting for X years after completing the degree; Then it is financially sound to consider having the company pay for it. If you are interested in finding out if an advanced degree in that field is possible/feasible for you; but you aren't 100% sure; And it is possible for your company to pay for the first few classes; then it is financially sound to consider having them pay for the first semesters worth of classes. The key is to determine if the company has a requirement that you must complete the degree, or you will owe them the money. In many cases you are not committed to having them pay for all semesters. I have known employees who used the company to pay for the early classes, then paid for the last few on their own. Keep in mind that most employers only pay you for the classes that you have good grades; they require you to submit paperwork before the semester; but don't pay you back until after the semester. Because of a rolling time frame you can protect yourself by keeping in reserve the maximum amount that you would have to repay the employer if you quit. For the companies I have worked for you only had to stay an extra year, you would only have owed them for that last year if you quit. Keeping a years tuition in reserve allows you to mitigate the risk of having to quit. If the question is about risk, then hedging make sense.", "title": "" }, { "docid": "f3046c7cf6ed9abb2345c7fd839c685f", "text": "Not a financial adviser, but I think there is some amount of debt that's ok. So I wouldn't suggest someone should go $200k into debt for a BA in English, but if you went somewhat into debt, say $30k, for a major with good job prospects and a high salary, it will probably be a good decision. Which is exactly what I did, and it worked out very well for me. I would advise students to apply to lots of schools with different entry requirements and tuition rates, just to see what their financial aid packages are like. Very often if a $50k a year school really wants you, they'll give you some scholarships to make it more affordable. If they don't give you enough, then you may just need to go to a cheaper school. edit: also, if your family isn't wealthy (like mine) you'll often qualify for federal loans. My loans from 2012 are at 3.5% interest, and my financial adviser is telling me to make the minimum payments so I can put more money in stocks.", "title": "" }, { "docid": "f1e6f9566c2ba0cfbba1efb1a974e392", "text": "That used to be the case with pursuing a PhD, but now many US institutions prefer you stay with them after the MS and get a PhD through them as well. If you think of it like a job, during an MS the instituion is basically funding your training, and their hope is that they can benefit from the research you produce as a PhD candidate. So it is difficult to find funding for a MS alone, but if you apply as a PhD candidate from the beginning they will fund you through the entire process. There is no contractual obligation, you can leave after you receive the MS regardless.", "title": "" }, { "docid": "00ce3bc199079b9acefce954774227f7", "text": "Draw up a budget and see where most of you expenses go to. See if you can cut any not essential expenses. If this doesn't help much you will need to increase your income. Ways to do this without going into debt may be to get a job, ask your parents for money, sell some of your non essential things, tutor fellow students or students in earlier years, just to name a few. Basically, if you want to stay out of debt you income needs to be higher than your expenses. So you either need to reduce your expenses, increase your income, or both. Without further information from yourself it would be quite hard to direct you in the right direction.", "title": "" }, { "docid": "2e92dac5806716153cdccea6b4a15c79", "text": "I would consult a tax professional for specific help. On my own research, I believe that you could. I know that when I made payments when I was in school for my undergraduate, I made payments on the interest. I believe that I was even told by my financial aid office that I could deduct the interest that I paid. I made not much money so I wasn't anywhere close to the MAGI >75k, but I believe you still could. Not only that but one other thing to consider is that if you have an unsubisidized loan, the interest still accrues when you are in school. In that case, it might be better to make at least some payments. It would save you from the total loan amount ballooning so much while you are in school.", "title": "" }, { "docid": "774a6ce23b650f1d71ae1a6fd89a30c8", "text": "Common investment advice recommends paying off all debt before you invest. This is certainly not debated when the debt is credit card debt or other high interest debt. Some would argue this doesn't necessarily apply to school debt or mortgage debt, however its not clear what to suggest. Since any investment you make is unknown whether you will win or lose money, and every debt you have is guaranteed to be a loss via interest, its almost always a good idea to pay off all of your debt first.", "title": "" }, { "docid": "db1d25136b1a5627b3cca03271cc50d5", "text": "\"100% debt free is an objective. Being there is good, but as long as you have a plan to get there, are sticking to it and it's moving you towards it at a reasonable rate (e.g. \"\"I will be debt free by the end of 2011.\"\"), you should be in good shape. It's when you don't ever expect to be debt free that you have a problem. Going into debt is one question and a very situation dependent one. Getting back out is another and a very easy one: pay off all debts as a fast as you reasonably can, starting with the highest interest ones. OTOH this doesn't imply that you should forgo every optional expense (including things like savings and entertainment) to pay off debts, that would be unreasonable, but just that paying down debts should always be considered when thinking about what to do with money.\"", "title": "" }, { "docid": "3bf2007efcb1606b85d40d03de6b5b05", "text": "I think about debt as a good option for capital investments that offer a return. In my opinion, a house and clothes you need for that new job are good things to borrow for. School is ok, depending on the amount. Car is ok, if it's a 3 year loan. The rest is not good. You should try to carry as little debt as possible, but don't let it dominate your life. If faced between the choice of paying ahead on your student loan and blowing $300 on an XBox, you should pay the loan. If the choice is between taking your kid to the zoo and paying the loan, have fun at the zoo.", "title": "" }, { "docid": "1c7c7fc1cb06ec373f996b7a2740bf69", "text": "\"You should pay for grad school without taking loans if your circumstances permit. There is the possibility of a tax write off for interest paid on student loans, but it's slightly complicated and it's very much a \"\"give me $10, and I'll give you $5 back\"\" kind of deal. You're better off not borrowing the money to begin with, even though I tend to think that borrowing for things which appreciate-- e.g., a house-- or which can significantly increase your earning capability-- e.g., the right kind of graduate school-- is generally better/wiser/more permissible than borrowing for something which depreciates, like a car. Having no student loan debt after graduation means you have greater freedom than someone who is laboring to pay student loan debt in addition to all of their other bills. My $0.02\"", "title": "" }, { "docid": "22cca4bfe30f9fcfa88a8c97b373dea8", "text": "If you need a new roof because your house is full of buckets that fill up every rain :) then that's most likely the item at the top of the list. If you need a new roof because you don't like the color, I'd do something else with it. If you are in the US and the 'education loan' has the same caveats attached as your average student loan, I would eye that one with intent if the roof can soldier on for a few years as is. The simple reason for this is that a student loan would be the one debt that you list that you can never get rid off unless you actually pay it off, no matter what happens (IOW student loans aren't bankruptable). Disregard this if the caveats in the first sentence don't apply...", "title": "" }, { "docid": "07b710be19ecd9d427a1c15c598c99b9", "text": "Congratulations on seeing your situation clearly! That's half the battle. To prevent yourself from going back into debt, you should get rid of any credit cards you have and close the accounts. Just use your debit card. Your post indicates you're not the type to splurge and get stuff just because you want it, so saving for a larger purchase and paying cash for it is probably something you're willing to do. Contrary to popular belief, you can live just fine without a credit card and without a credit score. If you're never going back into debt, you don't need a credit score. Buying a house is possible without one, but is admittedly more work for you and for the underwriters because they can't just ask the FICO god to bless you -- they have to actually see your finances, and you have to actually have some. (I realize many folks will hate this advice, but I am actually living it, and life is pretty good.) If you're in school, look at how much you spend on food while on campus. $5-$10/day for lunch adds up to $100-$200 over a month (M-F, four weeks). Buy groceries and pack a lunch if you can. If your expenses cannot be reduced anymore, you're going to have to get a job. There is nothing wrong with slowing down your studies and working a job to get your income up above your expenses. It stinks being a poor student, but it stinks even more to be a poor student with a mountain of debt. You'll find that working a job doesn't slow you down all that much. Tons of students work their way through school and graduate in plenty of time to get a good job. Good luck to you! You can do it.", "title": "" }, { "docid": "a6538981686b2af921afea0fb21d7b9c", "text": "\"Fool's 13 steps to invest is a good starting point. Specifically, IFF all your credit cards are paid, and you made sure you've got no outstanding liabilities (that also accrues interest), stock indexes might be a good place for 5-10 years timeframes. For grad school, I'd probably look into cash ISA (or local equivalent thereof) -the rate of return is going to be lower, but having it in a separate account at least makes it mentally \"\"out of sight - out of mind\"\", so you can make sure the money's there WHEN you need it.\"", "title": "" }, { "docid": "9cba51b1a251322e72969466de51d809", "text": "All great answers. The only thing I didn't see mentioned was that student loans are not dischargable in a bankruptcy. So for example if you took money that could have gone to student loans and poured it into other debt, then for some reason declared bankruptcy later, your student load debt would remain while other debt would be discharged; essentially that money would have been better spent on the student loan. This isn't to advocate that you should pay down student loans with the intent of declaring bankruptcy, or that this makes it a better decision necessarily, just a factor that is sometimes forgotten.", "title": "" }, { "docid": "bc3fac15e2f8646c244551e0b846d17b", "text": "\"Your main reason to not pay off your debts right now seems to be: Enjoy life while \"\"I am young\"\" and not miss opportunities to have fun? I think the good news is that having fun usually does not require spending a lot of money. I would propose that most of the times when we considered something fun it had more to do with who we were with than what we were actually doing. Of course there are many fun things that are expensive, but there are even more fun things that require little money at all. My suggestion to you would be to prioritize your debt in a responsible way such that you have a plan to pay it off quickly, but if something comes along that does require extra money, don't be afraid to make an adjustment. For example, you can try to put 2000€ towards your debt every month, but if some exciting adventure comes along that you really want to do and it costs 1000€ one month, you shouldn't feel like you absolutely must turn it down. That month you could put 1000€ towards debt and the other 1000€ towards the adventure. I wouldn't recommend taking an adventure every month, but I wouldn't always turn one down either. Besides, I think most of the time you can have lots of fun for free.\"", "title": "" }, { "docid": "67c31d2f35d612cbf8002be1e740d5fd", "text": "while not stated, if you have any debt at all, use the $3000 to pay it off. That's the best investment in the short term. No risk and guaranteed reward. College can invite all sorts of unexpected expenses and opportunities, so stay liquid, protect working capital.", "title": "" } ]	fiqa
3e3c33c39a17469e54ee135478fad2cd	If the co-signer on my car loan dies, can the family take the car from me like they're threatening to?	[ { "docid": "fefedb73e7061bab2a239618cd3b88c2", "text": "It looks to me like this is a 'call an attorney' situation, which is always a good idea in situations like this (family legal disputes). But, some information. First off, if your family is going to take the car, you certainly won't need to make payments on it any more at that point, in my opinion. If the will goes through probate (which is the only way they'd really be able to take it), the probate judge should either leave you with the car and the payments, or neither (presumably requiring the family to pay off the loan and settle your interest in the car). Since the car has negative net value, it seems unlikely that the probate judge would take the car away from you, but who knows. Either way, if they do take the car away from you, they'll be doing you a service: you have a $6,000 car that you owe $12,000 on. Let them, and walk away and buy another car for $6,000. Second, I'm not sure they would be allowed to in any event. See the Illinois DMV page on correcting titles in the case of a deceased owner; Illinois I believe is a joint tenancy state, meaning that once one owner dies, the other just gets the car (and the loan, though the loan documents would cover that). Unless you had an explicit agreement with your grandfather, anyway. From that page: Joint Ownership A title in the names of two or more persons is considered to be in joint tenancy. Upon the death of one of them, the surviving joint tenant(s) becomes the owner(s) of the vehicle by law. Third, your grandfather can fix all of this fairly easily by mentioning the disposition of the car and loan in his will, if he's still mentally competent and wishes to do so. If he transfers his ownership of the car to you in the will, it seems like that would be that (though again, it's not clear that the ownership wouldn't just be yours anyway). Finally, I am not a lawyer, and I am not your lawyer, so do not construe any of the text of this post as legal advice; contact a lawyer.", "title": "" }, { "docid": "a657ebfb18ae322601582d68caf28d63", "text": "If you've been paying on the car for three years, it's possible that your credit is in a place where you don't need a co-signer any more. See if your bank will re-fi with you as the sole debtor. If they won't do it, find another institution who will. The re-fi will take your grandpa off the loan, and whichever institution that does the re-fi will still have a lien on the title until you pay it off. Then, if you can do this soon enough, figure out if grandpa can sign you off the title.", "title": "" }, { "docid": "3e75f93da64387ecaa1aa9283f7e38ac", "text": "You're driving a car worth about $6000 which has a $12,000 loan against it. You're driving around in a nett debt of $6000. The best thing your grandfather could do for you, if possible, is to take your name off both the title and the loan, refinancing the car in his name only. If possible while still letting you drive the car. When he dies, you will be out of a car, but also out of a $12,000 debt which I'm sure you could do without. Okay, the best thing your grandfather could do, from your wallet's point of view, is paying off the loan for you and then taking his name off the title.", "title": "" }, { "docid": "103910ac8dd3b76e41e68a79b1d5874f", "text": "My grandmother passed away earlier this year. When I got my car 3 years ago, I did not have good enough credit to do it on my own or have her as a co-signer. We had arranged so that my grandmother was buying the car and I was co-signing. A similar situation was happening and I went to my bank and took out a re-finance loan prior to her passing. I explained to them that my grandmother was sick and on her death bed. They never once requested a power of attorney or required her signature. I am now the sole owner of the vehicle.", "title": "" }, { "docid": "ee24f07034a377de82b18f0529c03443", "text": "I think Joe is right, it seems that you will get the car once grandpa passes. It clearly states that on the DMV page. I would work like crazy to get this car paid off ASAP. Work extra and see if you can get it paid off in less than a year. Once paid off, have grandpa sign it over to you. This is a really toxic situation that you can reduce somewhat by having the car in your name only. Learn from this: have a will and keep it up to date. There is going to be a lot of fighting over the assets that grandpa leaves behind. You don't want that to be your legacy, and you don't want to tarnish your grandfathers memory by participating in such nonsense. My concern is why you have such poor credit. Understand that poor credit is a choice of behavior and there is no one to blame but yourself. I would recommend to stop borrowing completely until this car is paid off and all of your obligations are paid back (that is if you have items that are in collections). No vacations, no eating out, etc... Work don't spend.", "title": "" }, { "docid": "6a48cbd080376ed93cb44d5e4eb88d26", "text": "\"I was in a similar situation about a year ago, and the expedient thing to do would be to remove your grandfather from the Title. He would probably have to agree with this, but I think he will if you approach it correctly. In my case, I was the cosigner for my son's car loan and was told by the dealer that I \"\"had to be on the title\"\". This is not true as far as Virginia is concerned (Illinois may be different). I know this because when my son dropped his auto insurance I got the fine for having an uninsured vehicle and was told during the hearing that the dealer was mistaken. It all worked out in the end, but all we had to do was go down to the DMV and get my name taken off of the title. I'm sure if you approach it this way - you do not want him to be responsible for things that you do (who would get sued if you caused an accident?) he would agree to have his name removed from the title.\"", "title": "" }, { "docid": "2ef47bc6e77a08529092f461b85d993b", "text": "\"The lead story here is you owe $12,000 on a car worth $6000!! That is an appalling situation and worth a lot to get out of it. ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.) I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period. Now comes an \"\"adversary\"\", who is threatening to snatch the car away from you. I have to imagine they are emotionally motivated. How convenient :) Let them take it. But it's important to fully understand their motivations here. Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down. Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers. Let them win the battle; you win the war: make sure the legal details put you in the clear of it. Ideally, do this with consent with the grandfather \"\"in response to his direct family's wishes\"\", but keep up the theater of being really mad about it. Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it. Eventually they'll figure out they took a $6000 loss taking the car from you, and want to talk with you about that. Stay with blind rage at how they took my car. If they try to explain what \"\"upside down\"\" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go? If they ask for money, say they're swindling. \"\"You forced me, I didn't have a choice\"\". (which happens to be a good defense. They wanted it so bad; they shoulda done their homework. Since they were coercive it's not your job to disclose, nor your job to even know.) If they want you to take the car back, say \"\"can't, you forced me to buy another and I have to make payments on that one now.\"\"\"", "title": "" }, { "docid": "a2d26997f808375f6f9b0725bb83a7ee", "text": "My family members, particularly my aunt (his daughter), are telling me that when my grandpa dies they are taking my car. Bring this up with Grandpa. If this is what he wants to have happen, then help him make it happen before you finish paying $12,000 on a car worth only $6,000. Let the Aunt and other relatives deal with the remaining $12,000. If that isn't what he wants to have happen, then work out how you and he can legally make sure that what he wants to have happen actually happens. If the Aunt or others bring it up, make sure they understand that you still owe $12,000 on the car, and if they get the car they also get the loan. If they refuse to pay the loan then make sure they know you will cooperate with the bank when they attempt to repossess the car - up to and including providing them with keys and location. This will hurt your credit, and you will be on the hook for the remaining portion of the loan, but you at least won't have to deal with all of it - they'll sell it at auction and your loan amount will fall a little. But the best course of action is to work with Grandpa, and make sure that he understands the family's threats, how that will affect you since you're on the loan, and what options you'd like to pursue.", "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": "47f824d42ed7ff0928853fa65f72d426", "text": "\"I am not sure how anyone is answering this unless they know what the loan was for. For instance if it is for a house you can put a lien on the house. If it is for the car in most states you can take over ownership of it. Point being is that you need to go after the asset. If there is no asset you need to go after you \"\"friend\"\". Again we need more specifics to determine the best course of action which could range from you suing and garnishing wages from your friend to going to small claims court. Part of this process is also getting a hold of the lending institution. By letting them know what is going on they may be able to help you - they are good at tracking people down for free. Also the lender may be able to give you options. For example if it is for a car a bank may help you clear this out if you get the car back plus penalty. If a car is not in the red on the loan and it is in good condition the bank turns a profit on the default. If they can recover it for free they will be willing to work with you. I worked in repo when younger and on more than a few occasions we had the cosigner helping. It went down like this... Co-signer gets pissed like you and calls bank, bank works out a plan and tells cosigner to default, cosigner defaults, banks gives cosigner rights to repo vehicle, cosigner helps or actually repos vehicle, bank gets car back, bank inspects car, bank asks cosigner for X amount (sometimes nothing but not usually), cosigner pays X, bank does not hit cosigners credit, bank releases loan and sells car. I am writing this like it is easy but it really requires that asset is still in good condition, that cosigner can get to the asset, and that the \"\"friend\"\" still is around and trusts cosigner. I have seen more than a few cosigners promise to deliver and come up short and couple conspiring with the \"\"friend\"\". I basically think most of the advice you have gotten so far is crap and you haven't provided enough info to give perfect advice. Seeking a lawyer is a joke. Going after a fleeing party could eat up 40-50 billable hours. It isn't like you are suing a business or something. The lawyer could cost as much as repaying the loan - and most lawyers will act like it is a snap of their fingers until they have bled you dry - just really unsound advice. For the most part I would suggest talking to the bank and defaulting but again need 100% of the details. The other part is cosigning the loan. Why the hell would you cosign a loan for a friend? Most parents won't cosign a loan for their own kids. And if you are cosigning a loan, you write up a simple contract and make the non-payment penalties extremely costly for your friend. I have seen simple contracts that include 30% interests rates that were upheld by courts.\"", "title": "" }, { "docid": "0f422c0f802ac7f1df127f96a2e1c1e2", "text": "It's perfectly legal for your brother to make a loan to you. However those two transactions are separate. If he defaults on the LC loan because you didn't pay him, it's his responsibility. If you default on your loan with him, you've got big problems. Money + family/friends = scary.", "title": "" }, { "docid": "f95199bb23a6a4f41cb7bd60ecc340f8", "text": "It is possible for him to get a loan against the house as long as the deeding all takes place at the same time as the loan is closing. Basically you and your brother will both have paperwork to sign, and the title company will not send out checks until the loan funds from the mortgage company. For that deeding to take place, the estate will generally have to be fully settled. That can take time, but you might wish to retain a lawyer to be certain your interests are completely protected. Many people feel like getting legal representation will strain family relationships, but I find the opposite to be true. They often grease the wheels and get the process finished quickly and fairly which ultimately reduces such strain. I would view it as a good sign if he is paying off large debts, because that means he will be in a better position to take a mortgage to pay you your share, but that assumes he is acting in good faith.", "title": "" }, { "docid": "bb68642a73cf83fa8b727e24c41e3068", "text": "\"I'll take an alternate route: honesty + humor. Say something like this with a smile and a laugh, like you know they're crazy, but they maybe don't know it yet. \"\"Are you crazy? Co-signing a loan can put us both in a lot of potential danger. First, you shouldn't get a loan that you can't afford/attain on your own, and second, I'd be crazy to agree to be liable for a loan that someone else can't get on their own. You want something bad enough, you get your credit rating in order, or you save up the money - that's how I bought (my car/house/trip to Geneva). I'd be happy to point you in the right direction if you want to put a plan together.\"\" You're offering help, but not the kind that puts you in danger. Declining to co-sign a loan can't damage your relationship with this person as much as failure to pay will.\"", "title": "" }, { "docid": "64fb7a323214f50afbc01fecc4753d61", "text": "Your first step is to talk to the current lender and ask about refinancing in the other person's name. The lender is free to say no, and if they think the other person is unlikely to pay it back, they won't refinance. If you're in this situation because the other person didn't qualify for a loan in the first place, the lender probably won't change their mind, but it's still worth asking. From the lender's point of view, you'll be selling the other person the car. If they qualify for a loan, it's as simple as getting the loan from a bank, then doing whatever is required by your state to sell a car between either private parties or between relatives (depending on who the other person is). The bank might help you with this, or your state's DMV website. Here are a few options that don't involve changing who is on the loan: Taking out a loan for another person is always a big risk. Banks have entire departments devoted to determining who is a good credit risk, and who isn't, so if a person can't get a loan from a bank, it's usually for a good reason. One good thing about your situation: you actually bought the car, and are the listed owner. Had you co-signed on a loan in the other person's name, you'd owe the money, but wouldn't even have the car's value to fall back on when they stopped paying.", "title": "" }, { "docid": "471cf77dadff4da873d468a9f47e4634", "text": "Trying to forcefully reclaim the money will ruin the relationship. In general it's bad practice to loan money to family.", "title": "" }, { "docid": "02c554b123f454bc0dc4804415f6849f", "text": "If I am the guarantor for someone else's loan, can my personal property be possessed if the other person doesn't pay back the loan? As you have not indicated jurisdiction / country ... laws vary. In general; Yes. Your personal property can be possessed. However the financial institution has to send notices, get a court order and then possess your property and auction it. They can also freeze your Bank Account, or any other assets you have. There is no restriction as you have given a blanket guarantee. Note depending on Jurisdictions your estate and or legal heirs can also be liable to this if you die during the course of loan. can my property be mortgaged as a guarantee to his loan? Depending on how this is worded in legal contract, you can mortgage your property ONLY as a guarantee to his loan. In such cases financial institution can only take your property, but cannot take any other assets such as Bank deposits etc.", "title": "" }, { "docid": "7ba1aa8230b37c2401e3c92abe036ee2", "text": "\"Your arrangements with the bank are irrelevant. Whoever is named on the title of the vehicle owns it. If she is the \"\"primary\"\", then I assume her name is on the title, therefore she owns the car. If you drive off with the car and it is titled in her name, she can report it stolen and have you arrested for grand theft auto unless you have a dated and signed permission in writing from her to use the car. Point #2: If a car loan was involved, then you didn't \"\"purchase\"\" the car, the bank did. If you want to gain ownership of the car, then you need to have her name removed from the title and have yours put in its place. Since the bank has possession of the title, this will require the cooperation of both your girlfriend and the bank.\"", "title": "" }, { "docid": "d76c00feba56517fbd458f3b54de4739", "text": "\"My personal rule is to not loan money (or co-sign) for any amount that I am not willing to give away. It can go wrong in so many ways, and having a family or friend involved means making a \"\"business\"\" decision is difficult. If a bank won't loan the person the money, why should I? Being a co-signer is the same as borrowing the money in my name and giving it right over to the borrower. There might be great reasons to do it. I would probably sign a loan to keep my family alive or healthy, but no other reason. There are many ways to help without signing a loan. Give a room and a place to live, loan a car. The other thing is if you really truly believe in the borrower, it won't do long term damage to your credit or your financial goals, and you are the only resort; go ahead. I am thinking about helping a teenager afford their first car or student loans.\"", "title": "" }, { "docid": "f88dded301c180c38ceda078c73a1813", "text": "California bankruptcy law requires disclosure of any gift made by the person declaring bankruptcy in the past 12 months, and any asset transfers in the past 2 years (with a couple of minor exceptions). This would most certainly include the car, if it is regifted back to you. Such a claim would likely be considered fraudulent, though this would be a matter for the lawyers and bankruptcy trustee in question. There's a blog which you may wish to check out, the California Bankruptcy Blog, which has a specific entry on gifts. Now, there is a specific exemption for automobiles, but only up to a total of $2725. Legally, I believe there's nothing you can do here. If the $10K was a loan, it will be discharged in bankruptcy. If it was a gift, it'll have to be declared and the car will have to be sold. If regifted or transferred, it must be declared and will likely (but not definitely) be determined as an invalid disposal of assets. Either you or your family member will have to discuss this with a bankruptcy lawyer. I'm sorry your generous act is likely to get tangled up here. :(", "title": "" }, { "docid": "aa7249bc10aae89097fb5618623ffebb", "text": "\"I can answer this question for my jurisdiction (Florida, USA), because I lived through it. My Dad (\"\"Alice\"\") passed away in 2008, just as the housing crisis was starting to heat up. What happened to the Mortgage? My Dad had a will in place. It was an old will (from the 1980's), but never-the-less, a will. We had to provide paperwork to the court that my Mom had already passed away, and my oldest brother was living out-of-state (he would have been the executor, otherwise). With the proper paperwork, I became the Executor, and the property passed in to probate. At this point, the \"\"Estate\"\" was responsible for the house and the mortgage on it (meaning me, as I was the Executor). We decided to sell the house, so we hired a realtor, and set an asking price about $40k over what was owed on it. As we waited for it to sell, I had to make monthly mortgage payments, and payments to the HOA (otherwise the HOA could put a lien on the property, making it more difficult to sell, should we find a buyer). Is it Automatically Transferred? In most jurisdictions, I would say not \"\"automatic\"\". I definitely had get an estate lawyer and file the proper legal paperwork with the local county courthouse. Some states have an easier probate process (\"\"Summary Administration\"\" in Florida), that eases the requirements for small estates. Is Bob expected to pay it off all at once? No, the mortgage holder was happy for me to make payments (out of other estate assets) in lieu of my Dad. The were earning interest, after all. This is probably true in most cases. Can the House be Foreclosed on? Yes. In our case, being 2008, we had a hard time selling the property. The asking price quickly went from $40k over what was owed, to $20k over, to $10k over, then to being equal to the mortgage value. Finally, I approached the bank about options. They suggested a \"\"Deed in Lieu of Foreclosure\"\" process. It was easier for us, and the bank had to pay less lawyers and such. Otherwise, a \"\"Deed in Lieu\"\" is effectively the same as a Foreclosure. At that point, we stopped making payments. Eventually, me and all my siblings (the \"\"heirs\"\") had to sign the proper paperwork giving the house over to the bank. In our case, the bank did not pursue us (or rather, the Estate) for the difference between final (auction) sale price and the mortgage balance (it was an FHA loan, so the US Government wound up picking up the difference). From what I understand, this could have happened, and we would have wound up with basically nothing out of the Estate. Can the Lender Force the Sale? I can't give a definite answer on this, but it probably depends. If you don't pay? Yes they sure can--it's usually part of the standard mortgage contract! I see 2 other options:\"", "title": "" }, { "docid": "bb9ea76eef68b7af44e872e2f37d6569", "text": "Sorry, but I think you really do need an attorney here. This is the kind of minefield where knowing all the precedents and edge cases can make a huge difference in what you can or can't do, and a misplaced comma can make or break your case. Note that AT BEST you could sell your own interest in the house -- owning the note does not mean owning the property, it only means that they issued the note on the strength of your share of the property. And a half-interest in a single family house has little value outside the family, except to sell it to whoever owns the other half. Which is probably the best answer: Sell your half to your Aunt, if she can afford to buy it. She then gets sole control of the house, and you get the money you seem to need right now, and everyone in the family is much less stressed.", "title": "" }, { "docid": "25c80accc613ec73f5527afe291d030d", "text": "\"The wording of this question is very confusing because \"\"primary signer\"\" would, in ordinary parlance, mean the person borrowing the money and the co-signer (not consigner) would mean the one who is guaranteeing the repayment of the loan: if the borrower does not pay, the co-signer is liable for making the payments. Whose name is on the title of the car? Who borrowed the money to buy the car? Is the loan in your name and your son co-signed the loan to induce the bank to loan you money to purchase the car, or is it the other way around, that your son borrowed the money and you co-signed the loan in order to induce the bank to loan your son the money? If the car title and the loan are in your name, are you defaulting on the loan and so your son is making the loan payments that should have come from you? Or is it that your son borrowed the money to buy the car, his name is on the title, he is making the payments, and you are no longer interested in backing him up in case he defaults and the bank comes after you for the money?\"", "title": "" }, { "docid": "47ca2ebd48c16a0fe2a36b483c2e944e", "text": "\"fair enough, but I wasn't sure if you actually get it or not because your question seemed to revolved around cash and transaction value. You are really just said \"\"skewing\"\" is if you didn't add net debt the multiple wouldn't be a valid muliptle. If you understand it, why start out with this mental exercise of saying \"\"we shouldn't calculate multiples wrong, because then they would be wrong\"\"?\"", "title": "" }, { "docid": "aa1af5d9d393c3f322ed64975a43200c", "text": "\"Not all of the reason to start an LLC is liability (although that is implicit). There are two main reasons as far as I have experienced it: I always recommend that people set things up properly from the beginning. If you do start to grow, or if you need to cut your losses, it can be very difficult to separate yourself from the company if it isn't set up entirely apart from you. I was once told, \"\"Run your small company as you would wish it to be.\"\" Don't get into bad habits at the beginning. They become bad habits in big companies later on.\"", "title": "" } ]	fiqa
fc2b8f19da98d1affecfadeb13535e96	Is “folio” an acceptable contraction of “portfolio”?	[ { "docid": "76b2d1968365c35f2e5bf98dcb880a9a", "text": "\"Technically, no. According to the dictionary, a folio is a single sheet, and a portfolio is a folder or case for keeping your folios. In finance, your collection of investments is called your portfolio, probably because your broker (before the digital age) would keep the records of what each of his clients held in separate portfolios. However, I have seen the word folio used as a short colloquialism for portfolio, and if you google \"\"investment folio\"\" you will see it used this way, mainly in trademarked names of financial firms.\"", "title": "" } ]	[ { "docid": "ab52113ec7e01f75d7dbf10acd3beb4c", "text": "\"I'm searching for a master's thesis topic in equity investment or portfolio management and I'd be grateful if someone could tell me what are the hot \"\"trends\"\" going on right now on the market? Any new phenomenons (like the rise of blockchain, etf... but more relate to the equity side) or debates ( the use of the traditional techniques such as Beta to calculate WACC for example ...) ?\"", "title": "" }, { "docid": "295c1cac07bfe58abdf2e0119bef2013", "text": "\"> When did we switch the word \"\"image\"\" with \"\"optics\"\"? Back in 2010, the NYT wrote that \"\"[although the metaphorical expansion of 'optics' into the political arena feels novel, it has actually been brewing for a few decades.](http://www.nytimes.com/2010/03/07/magazine/07FOB-onlanguage-t.html)\"\" They identify usages going back to 1978 at least. It's not a direct synonym for \"\"image\"\", because it's often used to refer to a specific incident or transaction, where \"\"image\"\" wouldn't fit as well.\"", "title": "" }, { "docid": "1591690bb979c2f47dd02263ca7e3b83", "text": "\"This is another semantics question. Again what matters is how the words are commonly used, as the usage came about long before the technical definitions. In this case, when people say \"\"mutual fund,\"\" they are often including both unit investment trusts and closed end funds. Despite the labels the SEC has given in order to differentiate them, I'd say it's common (typical) practice to think of a closed-end fund as a type of mutual fund, rather than a different category altogether. That's the way I've seen it used, anyway.\"", "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": "4528e5c0fe117e1e8d0137b204884a6a", "text": "For us it's good. Long-only equity investing is mostly reading, thinking and modeling. Then there's the exciting 1% of communicating your work. Our office doesn't feel too DM like though. Gorgeous wood walls, plush rugs, artwork amazing NYC skyline view etc. We joke that you would think it was a law firm if not for the multiple monitors.", "title": "" }, { "docid": "1cbcf770e60f79eaa8769eba124b4658", "text": "\"Split your contributions evenly across the funds on that list with the word \"\"core\"\" or \"\"S&P\"\" in the name. Maybe add \"\"International Large Cap Index\"\". Leave it & rebalance occasionally. Read a book on Modern Portfolio Theory sometime in the next 5 years.\"", "title": "" }, { "docid": "f34126938100d1ea659c4147bd5c1df9", "text": "\"The SEC requires a certain format when submitting filings, which generally does not line up with how documents are typeset for printing. Rather than typeset the entire document again, it's just sort of accepted that the format in EDGAR will suck. Typesetters actually call the process \"\"EDGARizing.\"\" (I'm not making this up, I used to work in the department at a mutual fund company that put together the financial reports for the funds.) My guess is it's a relic from legacy systems at the SEC that can't handle newer formats like PDF.\"", "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": "12cf46e5aa8dc153b2ce8e72f94d8999", "text": "Diversified is relative. Alfred has all his money in Apple. He's done very well over the last 10 years, but I think most investors would say that he's taking an incredible risk by putting everything on one stock. Betty has stock in Apple, Microsoft, and Google. Compared to Alfred, she is diversified. Charlie looks at Betty and realizes that she is only investing in one particular industry. All the companies in an individual industry can have a downturn together, so he invests everything in an S&P 500 index fund. David looks at Charlie and notes that he's got everything in large, high-capitalization companies. Small-cap stocks are often where the growth happens, so he invests in a total stock market fund. Evelyn realizes that David has all his money tied up in one country, the United States. What about the rest of the world? She invests in a global fund. Frank really likes Evelyn's broad approach to equities, but he knows that some portion of fixed-income assets (e.g. cash deposits, bonds) can reduce portfolio volatility—and may even enhance returns through periodic rebalancing. He does what Evelyn does, but also allocates some percentage of his portfolio to fixed income, and intends to maintain his target allocations. Being diversified enough depends on your individual goals and investing philosophy. There are some who would say that it is wrong to put all of your money in one fund, no matter what it is. Others would say that a sufficiently broad index fund is inherently diversified as-is.", "title": "" }, { "docid": "17a27fcb24515dc5d0e26fce9f262469", "text": "\"Keep in mind, if the name is trademarked, you might have it taken away from you. If it's generic, there's a good chance the potential buyer would just move on and set up another domain name. Consider web names such as Stockpickr. The proper spelling is there, and remains unused, \"\"This domain may be for sale\"\" at the top of the page. I'm guessing they asked for too much money and the potential buyer just decided to move on. We are at the point where the new domain extensions (.space .name .guru and hundreds more) have watered down the potential value of many sets of words. I'm sure there are still good names, and yours might be as good as you think, but you might find resistance getting a deal that lasts beyond the sale date.\"", "title": "" }, { "docid": "015774d66cb5e67eebca40e7135e0a96", "text": "A proper world porfolio is a non-trivial task. No one answer exists which is the best one and how one should construct it. World? The problem with world portfolio is that it is not well-defined. Providers use it as they wish and people use it as they wish, read the history for further ado (messy stuff). You can build yourself world portfolio but warning it is getting harder. You can use this tool by selecting global equity to search through global funds -- it is very useful and allows you to find the low-cost funds with PE/PB/Div.yield. Also, investigate topic more with this tool, less spam.", "title": "" }, { "docid": "5103c63d89644a428f070da7464eb105", "text": "\"Ah ok, I can appreciate that. I'm fluent in English and Mr. Graham's command of English can be intimidating (even for me). The edition I have has commentary by Mr. Jason Zweig who effectively rewrites the chapters into simpler English and updates the data (some of the firms listed by Mr. Graham don't exist either due to bankruptcy or due to consolidation). But I digress. Let's start with the topics you took; they're all very relevant, you'd be surprised, the firm I work for require marketing for certain functions. But not being good at Marketing doesn't block you from a career in Finance. Let's look at the other subjects. You took high level Maths, as such I think a read through Harry Markowitz's \"\"Portfolio Selection\"\" would be beneficial, here's a link to the paper: https://www.math.ust.hk/~maykwok/courses/ma362/07F/markowitz_JF.pdf Investopedia also has a good summary: http://www.investopedia.com/walkthrough/fund-guide/introduction/1/modern-portfolio-theory-mpt.aspx This is Mr. Markowitz's seminal work; while it's logical to diversify your portfolio (remember the saying \"\"don't put all your eggs in one basket\"\"), Mr. Markwotiz presented the relationship of return, risk and the effects of diversification via mathematical representation. The concepts presented in this paper are taught at every introductory Finance course at University. Again a run through the actual paper might be intimidating (Lord knows I never read the paper from start to finish, but rather read text books which explained the concepts instead), so if you can find another source which explains the concepts in a way you understand, go for it. I consider this paper to be a foundation for other papers. Business economics is very important and while it may seem like it has a weak link to Finance at this stage; you have to grasp the concepts. Mr. Michael Porter's \"\"Five Forces\"\" is an excellent link between industry structure (introduced in Microeconomics) and profit potential (I work in Private Equity, and you'd be surprised how much I use this framework): https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy There's another text I used in University which links the economic concept of utility and investment decision making; unfortunately I can't seem to remember the title. I'm asking my ex-classmates so if they respond I'll directly send you the author/title. To finish I want to give you some advice; a lot of subjects are intimidating at first, and you might feel like you're not good enough but keep at it. You're not dumber than the next guy, but nothing will come for free. I wasn't good at accounting, I risked failing my first year of University because of it, I ended up passing that year with distinction because I focused (my second highest grade was Accounting). I wasn't good in economics in High School, but it was my best grades in University. I wasn't good in financial mathematics in University but I aced it in the CFA. English is your second language, but you have to remember a lot of your peers (regardless of their command of the language) are being introduced to the new concepts just as you are. Buckle down and you'll find that none of it is impossible.\"", "title": "" }, { "docid": "4fb93947461cf2614b37f4ea50bbec9b", "text": "Googling vanguard target asset allocation led me to this page on the Bogleheads wiki which has detailed breakdowns of the Target Retirement funds; that page in turn has a link to this Vanguard PDF which goes into a good level of detail on the construction of these funds' portfolios. I excerpt: (To the question of why so much weight in equities:) In our view, two important considerations justify an expectation of an equity risk premium. The first is the historical record: In the past, and in many countries, stock market investors have been rewarded with such a premium. ... Historically, bond returns have lagged equity returns by about 5–6 percentage points, annualized—amounting to an enormous return differential in most circumstances over longer time periods. Consequently, retirement savers investing only in “safe” assets must dramatically increase their savings rates to compensate for the lower expected returns those investments offer. ... The second strategic principle underlying our glidepath construction—that younger investors are better able to withstand risk—recognizes that an individual’s total net worth consists of both their current financial holdings and their future work earnings. For younger individuals, the majority of their ultimate retirement wealth is in the form of what they will earn in the future, or their “human capital.” Therefore, a large commitment to stocks in a younger person’s portfolio may be appropriate to balance and diversify risk exposure to work-related earnings (To the question of how the exact allocations were decided:) As part of the process of evaluating and identifying an appropriate glide path given this theoretical framework, we ran various financial simulations using the Vanguard Capital Markets Model. We examined different risk-reward scenarios and the potential implications of different glide paths and TDF approaches. The PDF is highly readable, I would say, and includes references to quant articles, for those that like that sort of thing.", "title": "" }, { "docid": "3e157c99719de6362593777ca5c8ce03", "text": "\"It may not apply for your situation, but if you were running a mutual fund, you could use the term \"\"front-end load\"\".\"", "title": "" }, { "docid": "ef18299621646b2cd361cf1313bf5a04", "text": "> A short position also loses money if the stock just appreciates more slowly than the broader market, which is one way an overvaluation can correct itself. Is there a derivative based on the literal second derivative (acceleration) of the stock price? If so, you'd be able to short those, yes?", "title": "" } ]	fiqa
9ffda0f027a57ae9b46aa02e0c9187e8	How can a 529 plan help me save for my child's college education?	[ { "docid": "aa4ffcd4f3c8fecb1eb09d43627077cb", "text": "You get to put money away with special tax incentives (ie - no or less taxes to pay) They are state sponsored and therefore pretty reliable, but some states are better than others. Like with many of these tax incentive type accounts (FSA, Dependent Care Spending Accounts) they are use it or lose it. (In a 529, use it or transfer it). So the money put away is a sunk cost towards education and cannot be repurposed for something else should your kid not want to attend school. http://money.howstuffworks.com/personal-finance/financial-planning/529.htm", "title": "" }, { "docid": "0aff45074a78612c35a10ee89986c131", "text": "\"If you're ready to start a 529 account, it makes a big difference which state you choose (some states have excessive fees). It doesn't have to be your own state, but some states give you tax incentives to stay in-state. What you need to do is check out Clark Howard's 529 Guide and check to see if your state is in the \"\"good\"\" list. If not, then pick out a good state.\"", "title": "" } ]	[ { "docid": "d2327929d4ae4a25f7cd38d555d2c894", "text": "You can take the money back out of a 529 plan if you end up not having enough educational expenses to use it on. The penalty is 10% of the earnings (you don't pay a penalty on the principal). You can also open a 529 in any state, not just the one where you reside. The minimums and fund selection for each state can vary widely, so it makes sense to look around and see if there's a state with a fund selection you like.", "title": "" }, { "docid": "818edb54d776c4eabb8f6feafd817655", "text": "If I were in your shoes (I would be extremely happy), here's what I would do: Get on a detailed budget, if you aren't doing one already. (I read the comments and you seemed unsure about certain things.) Once you know where your money is going, you can do a much better job of saving it. Retirement Savings: Contribute up to the employer match on the 401(k)s, if it's greater than the 5% you are already contributing. Open a Roth IRA account for each of you and make the max contribution (around $5k each). I would also suggest finding a financial adviser (w/ the heart of a teacher) to recommend/direct your mutual fund investing in those Roth IRAs and in your regular mutual fund investments. Emergency Fund With the $85k savings, take it down to a six month emergency fund. To calculate your emergency fund, look at what your necessary expenses are for a month, then multiply it by six. You could place that six month emergency fund in ING Direct as littleadv suggested. That's where we have our emergency funds and long term savings. This is a bare-minimum type budget, and is based on something like losing your job - in which case, you don't need to go to starbucks 5 times a week (I don't know if you do or not, but that is an easy example for me to use). You should have something left over, unless your basic expenses are above $7083/mo. Non-retirement Investing: Whatever is left over from the $85k, start investing with it. (I suggest you look into mutual funds) it. Some may say buy stocks, but individual stocks are very risky and you could lose your shirt if you don't know what you're doing. Mutual funds typically are comprised of many stocks, and you earn based on their collective performance. You have done very well, and I'm very excited for you. Child's College Savings: If you guys decide to expand your family with a child, you'll want to fund what's typically called a 529 plan to fund his or her college education. The money grows tax free and is only taxed when used for non-education expenses. You would fund this for the max contribution each year as well (currently $2k; but that could change depending on how the Bush Tax cuts are handled at the end of this year). Other resources to check out: The Total Money Makeover by Dave Ramsey and the Dave Ramsey Show podcast.", "title": "" }, { "docid": "ed0a834861a6e3accdc94feb5d815429", "text": "If these are children that may be employed, in a few years, it may well be worth walking them through some basics of the deductions around employment, some basic taxes, uses of banks, and give them enough of a basis in how the economy of the world works. For example, if you get a job and get paid $10/hour, that may sound good but how much do various things eat at that so your take-home pay may be much lower? While this does presume that the kids will get jobs somewhere along the way and have to deal with this, it is worth making this part of the education system on some level rather than shocking them otherwise. Rather than focusing on calculations, I'd be more tempted to consider various scenarios like how do you use a bank, what makes insurance worth having(Life, health, car, and any others may be worth teaching on some level), and how does the government and taxes fit into things. While I may be swinging more for the practical, it is worth considering if these kids will be away in college or university in a few years, how will they handle being away from the parents that may supply the money to meet all the financial needs?", "title": "" }, { "docid": "152b637940a0aa25faccd23d12b3fb4e", "text": "\"Place your savings into safe interest-bearing accounts. Take out the loans. Keep constant track of your net worth. Having 100,000$ and 80,000$ in interest free debt is better than having 20,000$. You can always convert money + debt into less money and less debt, but you cannot always convert less money and less debt into more money and more debt. Now, there are risks; that is why you want an interest-bearing account to place your savings in to offset the debt. This minimizes the risk. It also reduces the return. It is arguable that you should be at your most financially risky at a young age. I'd argue that your future earnings are your by far largest asset at this point, and as a high school student going into college those future earnings have extremely high variability. Your financial situation is extremely unpredictable; being conservative about your high-leverage student-loan + education investments is probably justified. The fact you can manage arbitrage here means you should; and if you are careful, you can eliminate risk and get almost risk-free profit from the maneuver. If your money is in less than perfectly safe accounts, you are now doing leveraged investing and magnifying the risk and return of said investments. If your money must be spent on college or you'll be financially punished, then you may want to consider pulling it out before the last possible legal point just in case something goes wrong. Apparently 529 plans may not treat \"\"paying off student loans\"\" as a valid way to spend the money. You may need to talk to a lawyer or accountant about the legality of using these plans to pay off student loans, and the tax/penalties involved.\"", "title": "" }, { "docid": "16e25911a45c2f58774a7d7359982862", "text": "I was in a similar situation with my now 6 year old. So I'll share what I chose. Like you, I was already funding a 529. So I opened a custodial brokerage account with Fidelity and chose to invest in very low expense index fund ETFs which are sponsored by Fidelity, so there are no commissions. The index funds have a low turnover as well, so they tend to be minimal on capital gains. As mentioned in the other answer, CDs aren't paying anything right now. And given your long time to grow, investing in the stock market is a decent bet. However, I would steer clear of any insurance products. They tend to be heavy on fees and low on returns. Insurance is for insuring something not for investing.", "title": "" }, { "docid": "f17ea3ea13adcec5a67e063bb2b58a9f", "text": "Yes, it's considered the students asset, regardless of the custodian aspect. I don't know how you'd propose to put it in a retirement account, even with the earned income to facilitate this, the limit is $5500/yr. The larger issue is parental income. That and parental assets. Tough to game that part of the system to get aid. In the end, one should look to scholarships, both merit and non merit based to maximize college support.", "title": "" }, { "docid": "fd1024f7cd9f34366d2a4e2d2d54b67e", "text": "When I think of the loopholes that the richest of the rich exploit to get out of paying taxes, this article does seem kind of pointless. Why attack the 529 plan? It would be better to attack the expense of the education and the need for the plan in the first place. Upper middle classers shouldn't have to give a second thought to how much it will cost to send their kids to university, unless it is a private school. 30 years ago it cost 350 bucks for a semester. Now it is 10k or more. We all see that this is ridiculous, but it goes on and on. Rents have doubled or even tripled in the last 7 years and this is normal?", "title": "" }, { "docid": "eba5c2ba274df6502e56ad38243d40fb", "text": "I'm not a 'rule of thumb' guy, but here, I'd suggest that if you can set aside 10% of your income each year for college, that would be great. That turns out to be $900/mo. In 15 years, if you saw an 8% CAGR, you'd have $311K which happens to be in your range of expenses. And you'd still have time to go as the baby won't graduate for 22(?) years. (Yup, 10% is a good rule of thumb for your income and 3 kids) Now, on the other hand, I'd research what grants you'd be able to get if you came up short. If instead of saving a dime, you funded your own retirement and the spouse's IRA if she's not working, and time the mortgage to pay it off in 15 years from now, the lack of liquid funds actually runs in your favor. But, I'm not an expect on this, just second guessing my own fully funded college account for my daughter.", "title": "" }, { "docid": "5305cdb5756aaf5eb92e7db0276beb90", "text": "\"There are entire books devoted to this topic... :) I'd suggest focusing on a % of income that you can set aside for each child and start doing that instead of looking at a specific dollar target. I would look at a 529 plan to get the state tax benefit for growth. Also, be careful to counter the \"\"advice\"\" given by admissions folks, who encourage high school kids to \"\"choose the college that will make you happy\"\" and expose them to as many pictures of lovely, leafy private campuses as possible. The lawns at the private school are nice, but state colleges offer a great education at a relative bargain. Try to teach your kids about money so they understand the downsides of the loans that schools throw at you. I went to a state school, had very supportive parents and worked throughout. I came out with $750 of debt (on a 0% credit card for a laptop replacement). I have a friend who went to a similar, private school who came from a similar background and who is now in a similar place career-wise. Except he has a $500/mo monthly tribute to Sallie Mae. My parents started working on me when I was about 12, and it worked!\"", "title": "" }, { "docid": "0b418207b6cf9316c2b7b5d6ebf0b31c", "text": "\"There is no simple answer to your question. It depends on many things, perhaps most notably what college your daughter ends up going to and what kind of aid you hope to receive. Your daughter will probably fill out the FAFSA as part of her financial aid application. Here is one discussion of what parental assets \"\"count\"\" towards the Expected Family Contribution on the FAFSA. You can find many similar pages by googling. Retirement accounts and primary residence are notable categories that do not count. So, if you were looking to reduce your \"\"apparent\"\" assets for aid purposes, dumping money into your mortgage or retirement account is a possibility. However, you should be cautious when doing this type of gaming, because it's not always clear exactly how it will affect financial aid. For one thing, \"\"financial aid\"\" includes both grants and loans. Everyone wants grants, but sometimes increasing your \"\"eligibility\"\" may just make you (or your daughter) eligible for larger loans, which may not be so great. Also, each college has its own system for allocating financial aid. Individual schools may ask for more detailed information (such as the CSS Profile). So strategies for minimizing your apparent assets that work for one school may not work for others. Some elite schools with large endowments have generous aid policies that allow even families with sizable incomes to pay little or nothing (e.g., Stanford waives tuition for most families with incomes under $125,000). You should probably research the financial aid policies of schools your daughter is interested in. It can be helpful to talk to financial aid advisors at colleges, as well as high school counselors, not to mention general financial advisors if you really want to start getting technical about what assets to move around. Needless to say, it all begins with talking with your daughter about her thoughts on where to go.\"", "title": "" }, { "docid": "74b8f93f0dfe865fef3b174b3699a1da", "text": "For a parent deciding on contributing to a 529 plan the first consideration is the plan run by the state government that will trigger a state income tax deduction. You do have to at least look at the annual fees for the program before jumping into the state program, but for many people the state program offers the best deal because of the state tax deduction. Unfortunately for you California does not offer a state tax deduction for 529 plan contributions. Which means that you can pick another states program if the fees are more reasonable or if the investing options are better. You can even select a nationwide plan unaffiliated with a state. Scholarshare is run by TIAA-CREF. TIAA-CREF is a large company that runs pension and 403(b) funds for many state and local governments. Many teacher unions use them. They are legitimately authorized by the state of California: The ScholarShare Investment Board sets investment policies and oversees all activities of ScholarShare, the state’s 529 college investment plan. The program enables Californians to save for college by putting money in tax-advantaged investments. After-tax contributions allow earnings to grow tax-deferred, and disbursements, when used for tuition and other qualified expenses, are federal and state tax-free. The ScholarShare Plan is managed by TIAA-CREF Tuition Financing, Inc. The ScholarShare Investment Board also oversees the Governor’s Scholarship Programs and California Memorial Scholarship Program. note: before picking a plan from another state make sure that they allow outside contributions.", "title": "" }, { "docid": "0a7256c869390ae3442a3831d5568b59", "text": "If you have kids, there are also 529 funds to consider. They aren't pre-tax, but do have tax advantages. If your employer doesn't have a 401k, chances are they don't offer Health Savings Accounts, but that is another thing to look at.", "title": "" }, { "docid": "34023394bf31a456359b7021c120bf34", "text": "\"I will answer the question from the back: who can NOT afford luxury cars? Those whose parents paid for their college education, cannot afford luxury cars, but buy them anyway. Why? I have what may seem a rather shocking proposition related to the point of not saving for kids' college: parents do NOT owe children a college education. Why should they? Did your parents fund your college? Or did you get it through a mix of Pell grants, loans, and work? If they did, then you owe them $ back for it, adjusted for inflation. If they did not, well then why do you feel your children deserve more than you deserved when you were a child? You do not owe your children a college education. They owe it to themselves. Gifts do not set one up for success, they set one up for dependence. I will add one more hypothesis: financial discipline is best learned through one's own experiences. When an 18+ year old adult gets a very large amount of money as a gift every year for several years (in the form of paid tuition), does that teach them frugality and responsibility? My proposition is that those who get a free ride on their parents' backs are not well served in terms of becoming disciplined budgeters. They become the subjects of the question in this post: those why buy cars and houses they cannot afford, and pay for vacations with credit cards. We reap what we sow as a society. Of course, college is only one case in point, but a very illustrative one. The bigger point is that financial discipline can only be developed when there are opportunities to develop it. Such opportunities arise under one important condition: financial independence. What does buying children cars for their high-school graduation, buying them 4 years of college tuition, and buying them who knows what else (study abroad trips, airfare, apartment leases, textbooks, etc. etc.) teach? Does it teach independence or dependence? It can certainly (at least that's what you hope for) teach them to appreciate when others do super nice things for them. But does free money instill financial responsibility? Try to ask kids whose parents paid for their college WHY they did it. \"\"Because my parents want me to succeed\"\" is probably the best you can hope for. Now ask them, But do your parents OWE you a college education? \"\"Why yes, I guess they do.\"\" Why? \"\"Well, I guess because they told me they do. They said they owe it to me to set me up for success in life.\"\" Now think about this: Do people who become financially successful achieve that success because someone owed something to them? Or because they recognized that nobody owes them anything, and took it upon themselves to create that success for themselves? These are not very comfortable topics to consider, especially for those of you who have either already sunk many tens of thousands of dollars into your childrens' college education. Or for those who have been living very frugally and mindfully for the past 10-15 years driven by the goal of doing so. But I want to open this can of worms because I believe fundamentally it may be creating more problems than it is solving. I am sure there are some historical and cultural explanations for the ASSUMPTION that has at some point formed in the American society that parents owe their children a college education. But as with most social conventions, it is merely an idea -- a shared belief. It has become so ingrained in conversations at work parties and family reunions that it seems that many of those who are ardent advocates of the idea of paying for their childrens' education no longer even understand why they feel that way. They simply go with the flow of social expectations, unwilling or unable to question either the premises behind these expectations, or the long-term consequences and results of such expectations. With this comment I want to point to the connection between the free financial gifts that parents give to their (adult!) children, and the level of financial discipline of these young adults, their spending habits, sense of entitlement, and sense of responsibility over their financial decisions. The statistics of the U.S. savings rate, average credit card debt, foreclosures, and bankruptcy indeed tell a troubling story. My point is that these trends don't just happen because of lots of TV advertising and the proverbial Jones's. These trends happen because of a lack of financial education, discipline, and experience with balancing one's own checkbook. Perhaps we need to think more deeply about the consequences of our socially motivated decisions as parents, and what is really in our children's best interests -- not while they are in college, but while they live the rest of their lives after college. Finally, to all the 18+ y.o. adult 'children' who are reeling from the traumatic experience of not having their parents pay for their college (while some of their friends parents TOTALLY did!), I have this perspective to offer: Like you are now, your parents are adults. Their money is theirs to spend, because it was theirs to earn. You are under no obligation to pay for your parents' retirement (not that you were going to). Similarly your parents have no obligation to pay for your college. They can spend their money on absolutely whatever they want: be it a likeside cottage, vacations, a Corvette, or slots in the casino. How they spend their money is their concern only, and has nothing to do with your adult needs (such as college education). If your parents mismanage their finances and go bankrupt, it is their obligation to get themselves back in the black -- not yours. If you have the means and may be so inclined, you may help them; if you do not or are not, fair enough. Regardless of what you do, they will still love you as their child no less. Similarly, if your parents have the means and are so inclined, they may help you; if they do not or are not, fair enough. Regardless of what they do, you are to love them as your parents no less. Your task as an adult is to focus on how you will meet your own financial needs, not to dwell on which of your needs were not met by people whose finances should well be completely separate from yours at this point in life. For an adult, to harbor an expectation of receiving something of value for free is misguided: it betrays unjustified, illusory entitlement. It is the expectation of someone who is clueless as to the value of money measured by the effort and time needed to earn it. When adults want to acquire stuff or services, they have to pay for these things with their own money. That's how adults live. When adults want to get a massage or take a ride in a cab, are they traumatized by their parents' unfulfilled obligation to pay for these services? No -- they realize that it's their own responsibility to take care of these needs. They either need to earn the money to pay for these things, or buy them on credit and pay off the debt later. Education is a type of service, just like a massage or a cab ride. It is a service that you decide you need to get, in order to do xyz (become smarter, get a better paying job, join a profession, etc.). Therefore as with any other service, the primary responsibility for paying for this service is yours. You have 3 options (or their combination): work now so that you can earn the money to pay for this service later; work part-time while you are receiving this service; acquire the service on credit and work later to pay it off. That's it. This is called the real world. The better you can deal with it, the more successful you will become in it. Good luck!\"", "title": "" }, { "docid": "4f6b7f91feb3b35363e3f89ea2ff6128", "text": "Saving for college you have a couple of options. 529 plans are probably the best bet for most people wanting to save for their kids college education. You can put a lot of money away ~$300k and you may get a state tax deduction. The downside is if you're kid doesn't go to college you may end up eating the 10% penalty. State specific prepaid tuition plans. The upside is you know roughly the return you are going to get on your money. The downside is your kid has to go to a state school in the state you prepaid or there are likely withdrawal penalties. For the most part these really aren't that great of a deal any more. ESAs are also an option but they only allow you to contribute $2k/year, but you have more investment options than with the 529 plans. Traditional and ROTH IRA accounts can also be used to pay for higher education. I wouldn't recommend this route in general but if you maxed out your 401k and weren't using your IRA contribution limits you could put extra money here and get more or really different flexibility than you can with a 529 account. I doubt IRA's will ever be asked for on a FAFSA which might be helpful. Another option is to save the money in a regular brokerage account. You would have more flexibility, but lower returns after taxes. One advantage to this route is if you think your kid might be borderline for financial aid a year or two before he starts college you could move this money into another investment that doesn't matter for financial aid purposes. A few words of caution, make sure you save for retirement before saving for your kids college. He can always get loans to pay for school but no one is going to give you a loan to pay for your retirement. Also be cautious with the amount of money you give your adult child, studies have shown that the more money that parents give their adult children the less successful they are compared to their peers.", "title": "" }, { "docid": "cd55f90bd71c1fc6fbf7018fd284c21f", "text": "\"Uniform Transfer to Minors Act (UTMA) and Uniform Gift to Minors Act (UGMA) accounts in the United States are accounts that belong to your child, but you can deposit money into. When the child attains his/her majority, the money becomes theirs to spend however they wish. Prior to attaining their majority, a custodian must sign off on withdrawals. Now, they are not foolproof; legally, you can withdraw money if it is spent on the child's behalf, so that can be gamed. What you can do to protect against that is to make another person the custodian (or, perhaps make them joint custodians with yourself, requiring both signatures for withdrawals). UTMA/UGMA accounts do not have to be bank savings accounts; for example, both of my children have accounts at Vanguard which are effectively their college savings accounts. They're invested in various ETFs and similar kinds of investments; you're welcome to choose from a wide variety of options depending on risk tolerance. Typically these accounts have relatively small fees, particularly if you have a reasonable minimum balance (I think USD$10k is a common minimum for avoiding larger fees). If you are looking for something even more secure than a UGMA or UTMA account, you can set up a trust. These have several major differences over the UGMA/UTMA accounts: Some of course consider the second point an advantage, some a disadvantage - we (and Grandma) prefer to let our children make their own choices re: college, while others may not prefer that. Also worth noting as a difference - and concern to think about - in these two. A UGMA or UTMA account that generates income may have taxable events - interest or dividend income. If that's over a relatively low threshhold, about $1050 this year, those earnings will be taxed (on the child's own tax return). If it's over $2100 (this year), those earnings will be taxed at the parents' tax rate (\"\"kiddie tax\"\"). Trusts are slightly different; trusts themselves are taxed, and have their own tax returns. If you do set one of those up, the lawyer who helps you do so should inform you of the tax implications and either hook you up with an accountant or point you to resources to handle the taxes yourself.\"", "title": "" } ]	fiqa
4cf88d8c80e83a96c74444f03fa91530	(Legitimate & respectable) strategies to generate “passive income” on the Internet?	[ { "docid": "b9e1c27fe031708306c710af99aa271b", "text": "\"If you want real no hassle, look into getting an agent: http://www.xmarks.com/topic/photographers_agents Check Problogger for blogging info: http://www.problogger.net/ Passive income takes work. Making money off writing a novel/blogging, or photography is great, but you have to write the novel or take the pictures worth buying first. I've spent the last 3 years building a student management system for martial art studios, but it's been discouraging at times and lots of extra time and effort. If you have a common ideas for making passive money, then you have to be uncommon in the implementation. Which takes work. To quote one of the comments: You will never find a \"\"thing\"\" that will generate substantial amounts of money without needing day-to-day taking care of. He's right, the key is substantial, start slow, but start. If you don't start you'll never finish. And if you do it because you love it, the money won't matter. Sorry, this isn't a good answer, but it's a question that you'll need to answer yourself. My best suggestion, find a gap and fill it.\"", "title": "" }, { "docid": "855040ee19499447373751440ea23da9", "text": "\"The notion that you can put product on the web and sit back and watch the money roll in is a myth, plain and simple. If you put content on the web and expect people to pay money for your products (t-shirts, etc), you have to do the work to get your stuff seen by people, and preferably the right kind of people who will buy your stuff. That means you need to know your market and provide something that they are eager to pay for. This doesn't necessarily mean buying advertising to direct traffic to your site - there are plenty of no-cost ways to bring people to your web site, but instead of costing $$ the cost is in effort and time that you have to put into it. Also keep in mind that the more participants you have in your production and fulfillment pipeline, the less you will make off every sale. Hands-off production services like Zazzle or Cafe Press do everything for you, all you have to do is provide the artwork. However, they also take all the income and pay you a rather piddling percentage of sales. You can get a larger percentage of sales if you do more of the work yourself - like handmade items sold on Etsy. But then, you're doing work. Maybe you'll get $1 for each T-Shirt you sell. If you just upload your artwork to the production service and type in some product description text into their web sales catalog, how many sales will you make in the first month? Most likely somewhere between zero and two. Why should anyone buy your shirt over the tens of thousands of other designs carried by the same production service? It's your responsibility to tell people about your stuff and send them to the site to buy it. And that means it's not a \"\"passive\"\" income. For truly passive income, invest in bank CD's, treasury bonds, or in stocks that pay dividends. The only problem with that is you have to have money to make money this way. :/\"", "title": "" }, { "docid": "8ab3ff85798e96b75c4a76aa34681b41", "text": "One such place where you can sell your photos is iStockPhoto. They are pretty picky about the photos they allow, so you should be a pretty good photographer and have good equipment. It can take a while to build up an interest in your photos, but once you do you can make some decent money off it. My sister is a semi-pro photographer and makes about $500 a month off photos she sells there.", "title": "" }, { "docid": "b99117482e9156e3c869c932de26325c", "text": "One idea that I read among some of the many, many personal finance blogs out there is to create a niche website with good content and generate some ad revenue. The example the author gave was a website he'd made with some lessons to learn basic Spanish. Something as specific as that has a reasonable chance of becoming popular even if you never post new content (since you were looking for passive). The ad income won't be great, but it's likely to stay > 0 for a significant while.", "title": "" } ]	[ { "docid": "186949c06eb488b98bb884fff413d4d4", "text": "Renting a house out using a management company is mostly passive income. Earning affiliate income from companies that pay on a recurring basis is closer to passive income.", "title": "" }, { "docid": "d4127a0e7d70414027a0814062dfc7be", "text": "Can you provide me some evidence of all these $100k+/yr financial blogging jobs? Because you in no way over simplified what it takes to get to that level of blogging... If I'm wrong please show me how I can do that. I'm sure a lot of people here would be interested in knowing as well.", "title": "" }, { "docid": "0232795273db35aec6b64da0b50f514b", "text": "There are lots of different ways to generate passive income. What is Passive Income? Basically it is income you receive without having to consistently work for it i.e. paid to do your day job or get paid by the hour; instead you do the work once and then receive ongoing payments like a recording artist getting paid royalties or a book author etc... Online Passive income Also some online business models can be great ways to generate passive income, you set up an automated system online to drive traffic and sell products either as the merchant or an affiliate and get paid regularly without having to do any more work... You just need to use SEO or PPC or media buys or online advertising to generate the automated traffic to your website which will have special landing pages and sales funnels that do the conversion and selling for you. If you are an affiliate you don't even have to handle any products, packaging, delivering etc... And if it’s a digital product like software or information products they can be sent straight to the customers automatically online then you can set up a system that can generate true passive income. Time consuming or expensive! However the above mentioned methods of generating passive income tend to require a lot of work or special skills, talent or knowledge and can be expensive or time consuming to set up. Preferred Method Therefore for many people the preferred passive income method is fully-managed hands free property investing or other types of investing for that matter. But for people who want full ownership of the income generating asset then property investing is the best as they can sell and have control over the capital invested, whereas investing in a business for example will have a lot of other variables to consider, like the business sector, the market factors, the management team and even down to individual employee performance. So in my opinion, if you have the money to invest then fully-managed hands free buy-to-let property investing is one of the best types of passive income available to us today. Some of the most popular income generating property assets today in the UK include • Student property • Care Homes • Residential buy-to-let", "title": "" }, { "docid": "5b76302ffffe9f7cb6178113837b4c9e", "text": "\"Yeah, I'll take the challenge...:) How trustworthy these are and what are their sources of income? These are in fact two separate questions, but the answers are related. How trustworthy? As trustworthy as they're clear about their own sources of income. If you cannot find any clue as to why, what for and how they're paying you - you probably should walk away. What's too good to be true usually is indeed too good to be true. For those of the sites that I know of their sources of income, it is usually advertisements and surveys. To get paid, you have to watch advertisements and/or answer surveys. I know of some sites who are legit, and pay people (not money, but gift cards, airline miles, etc) for participating in surveys. My own HMO (Kaiser in California) in fact pays (small amounts) to members who participate in enough surveys, so its legit. Are these sites worthwhile to consider for extra income? Not something you could live off, but definitely can get you enough gift cards for your weekly trip to Starbucks. What do I need to consider tax wise? Usually the amounts are very low, and are not paid in cash. While it is income, I doubt the IRS will chase you if you don't report the $20 Amazon gift card you got from there. It should, strictly speaking, be reported (probably as hobby income) on your tax return. Most people don't bother dealing with such small amounts though. In some cases (like the HMO I mentioned), its basically a rebate of the money paid (you pay your copays, deductibles etc. Since the surveys are only for members, you basically get your money back, not additional income). This is in fact similar to credit card rebates. Is there a best practice for handling the income? If we're talking about significant amounts (more than $20-30 a year), then you need to keep track of the income and related expenses, and report it as any other business income on your taxes, Schedule C. Is there a good test to determine what is and isn't a scam? As I said - if it looks too good to be true - it most likely is. If you're required to provide your personal/financial information without any explanation as to why, what it will be used for, and why and what for you're going to be paid - I'd walk away. Otherwise, you can also check Internet reviews, BBB ratings, FTC information and the relevant state agencies and consumer watchdogs (for example: http://www.scamadviser.com) whether they've heard of that particular site, and what is the information they have on it. A very good sign for a scam is contact information. Do they have a phone number to call to? Is it in your own country? If its not in your own country - definitely go away (for example the original link that was in the question pointed to a service whose phone number is in the UK, but listed address is in Los Angeles, CA. A clear sign of a scam). If they do have a phone number - try it, talk to them, call several times and see how many different people you're going to talk to. If its always the same person - run and hide. Do they have an address? If not - walk away. If they do - look it up. Is it a PMB/POB? A \"\"virtual\"\" office? Or do they have a proper office set up, which you can see on the map and in the listings as their office? And of course your guts. If your guts tell you its a scam - it very likely is.\"", "title": "" }, { "docid": "920a6abb4e2a6b52636ffc18ee168e39", "text": "That was a simple miscommunication, soupaman, for which I actually apologized. Do trolls apologize? No. Look at magicunderpants for an example of trolling. EDIT: btw, the reason I state my experience and our income is simple: it's proof. People who don't bother to even read the simple blog sidebar are going on about how I can't possibly know anything, but oh, I do. And people don't even know that it's possible to do what I do and earn that kind of income. But it is very possible. That's why I talked about numbers when I was invited to be interviewed on Mixergy. You have no idea the kind of fan mail I got for that. Most bootstrapping companies will never reveal their income, but we should: http://unicornfree.com/2011/drawing-back-the-curtain/", "title": "" }, { "docid": "797bf677449c3e419e3cc4b195ee69ae", "text": "Have you considered doing some small freelance programming jobs? One site I like for this type of thing is eLance.com, but I am sure there are others. Heck, you are soon going to be up all night anyway, why not earn some cash during those hours the rest of us foolishly waste on sleep?", "title": "" }, { "docid": "8895cc0158e6506d988c1cba21486344", "text": "\"Having read Rich Dad, Poor Dad, I absolutely despise Kiyosaki and everything he represents. He's all about \"\"passive income\"\", turnkey operations. That is, not actually working for your money. Gee, what an honourable strategy. How about actually doing something of value to earn a living?\"", "title": "" }, { "docid": "291f56490e7bcba32ac67dffcac0d347", "text": "It really staggers me that Reddit has achieved such a high valuation. Don't get me wrong, its social value is immense, but investment value? I can bet you won't find a more anti-ad, anti-sponsor environment on the whole wide web lol. Good luck monetizing...", "title": "" }, { "docid": "3aa935aa25a7851ccd845e69c74c8def", "text": "\"There is a site that treats you like a fund manager in the real market, Marketoracy, http://marketocracy.com/. Each user is given 1 million in cash. You can have multiple \"\"mutual funds\"\", and the site allows use to choose between two types of strategies, buy/sell, short/cover. Currently, options are not supported. The real value of the site is that users are ranked against each other (of course, you can op out of the rankings). This is really cool because you can determine the real worth of your returns compared to the rest of investors across the site. A couple years back, the top 100 investors were invited to come on as real mutual fund managers - so the competition is legitimate. Take a look at the site, it's definitely worth a try. Were there other great sites you looked at?\"", "title": "" }, { "docid": "6803ae51f7a81f7f70fb2f2f47be2529", "text": "You don't need a book, you need to advertise. Start trying different things untill you find the money. Scale up what works and also keep trying other avenues. What's your position on Google when people search for your Jewellery, Jewelry, Jewellers, Jewellery stores, etc., + dates (anniversary, mothers day) + brand names? Do you have a website? I've been killing it on google maps & local seo for years. FB ads would do great with the right targeting.", "title": "" }, { "docid": "04c56082cb44a60d92fa3313cf253183", "text": "\"Credit is a racket. What is a \"\"YouTube prank channel\"\"? Because that sounds dumb. Not trying to be negative, it just sounds dumb. If you're thinking something like that TV show \"\"Jackass\"\" Aren't there like 1000 of those on Youtube now? I doubt any of them are making any real money. I bet you can think of something better to do than acting like a fool on camera.. looking for an investor sounds like a sound plan but you need to have an idea first. The best advice I've heard is try to find a problem in the world that needs solving, and find a solution for it. If it's a good solution people will buy it. And then you've done something you can feel proud of.\"", "title": "" }, { "docid": "626ac5691c9df6cc278b1b2e933becde", "text": "Crap read. The title is “...make money WITH your startup.. ”. More than half talk about how to make money on the side and have nothing to do with your startup. The title should be “how to make money on the side because your shitty startup isn’t cutting it and you can’t let go”. Also doing things like asking for donations isn’t “making” money.", "title": "" }, { "docid": "acf15de22fceed448b726fb754095368", "text": "sorry, I didn't know how to do the thing about getting around a pay wall and I also couldn't find the article from a different source. Me being me, I tend to look at it as spreading information either way, as unperfect as my own method is.", "title": "" }, { "docid": "1929ac11a6e569a0b83fa76ec93b5d44", "text": "The Motley Fool is generally regarded as relatively legit, at least in that they're not likely to do anything outright fraudulent and they definitely have reasonably in-depth content to provide you. The Motley Fool makes a fair amount of money off the subscriptions, though, and they do hawk them quite violently. If I didn't have a generally good opinion of them to begin with, I'd have been completely put off as well. It's pretty shameful. I don't think it's worth hundreds of dollars a year, but then again, I don't look at investing as a second career like the Fool likes to suggest, either.", "title": "" }, { "docid": "aad7d81d0864ae51527e037701783ac4", "text": "\"Your objectives are contradictory and/or not possible. Eliminating the non-taxable objective: You could divide the $100K in 5 increments, making a \"\"CD ladder\"\" $25K in 3mo CD (or savings a/c) $25K in 6 mo CD $25K in 9mo CD $25K in 1 yr CD or similar structure (6mo also works well) Every maturing CD you are able to access cash and/or invest in another longest maturity CD, and earn a higher rate of interest. This plan also works well to plan for future interest rates hikes. If you are forced to access (sell CD's) ALL the $$$ at any time, you will only lose accrued interest, none of the principal. All FDIC guaranteed. If non-taxable is the highest priority, \"\"invest\"\" in a tax-free money market fund....see Vanguard Funds. You will not have FDIC guarantee.\"", "title": "" } ]	fiqa
0931c8b8d1d496d939e7e6726771a344	Buying a house. I have the cash for the whole thing. Should I still get a mortgage to get the homeowner tax break?	[ { "docid": "da95074b0c587333fa350554d8d1ff79", "text": "Not for the tax break, no; as others have said that still costs you money. However, with rates being low right now and brought a bit lower by the tax break, this is an opportunity for the safest form of leveraged investing you will ever find. If you invest that money, the returns on investment will probably be better than the mortgage rate, and that leaves you with a net profit. There is some risk if the market collapses, but it's less risk than any other form of borrowing to invest. That also leave you with more flexibility if you need cash in a hurry; you can draw down the investments rather than taking another loan. If the risk bothers you, you can do what I did and split the difference. I put 50% down and financed the rest. I sometimes regret not having pushed it harder, since it has worked out well for me ... but that was the level of risk I was comfortable with.", "title": "" }, { "docid": "4e2ae1307e47b1d6f0b007f2af9a1eef", "text": "\"Getting a mortgage for the interest write-off is like buying packs of baseball cards for the gum. That said, I'd refer you to The correct order of investing as much of that question really overlaps with this. This question boils down to priorities, the best use of the funds. There are those who suggest that a mortgage brings risk. Of course it does, just not for the borrower, the risk is borne by the lender. Risk comes from lack of liquidity. Say your girlfriend buys the house with cash, and leaves little reserve. She loses her job, and it's great that she has no mortgage. But she does have every other cost life brings, including a tax bill that can turn into a house getting foreclosed on. The details that you didn't disclose are those needed to look at the rest of the \"\"priorities\"\" list. A fully funded 401(k) with appropriate balance, and no other debt? And a 1 year emergency fund? I wouldn't argue against buying the house with cash. No real savings and passing on the 401(k) matched deposit? I'd think carefully about the longterm impact of the cash purchase.\"", "title": "" }, { "docid": "d18879a9c60ac596151ac4debef88018", "text": "Except for unusual tax situations your effective interest rate after taking into account the tax deduction will still be positive. It is simply reduced by your marginal rate. Therefore you will end up paying more if the house is financed than if it is bought straight out. Note this does not take into account other factors such as maintaining liquidity or the potential for earning a greater rate of return by investing the money that would otherwise be used to pay for the house", "title": "" }, { "docid": "f4337f65c2c443100a3f1bce1ce7805c", "text": "Your wealth will go up if your effective rate after taxes is less than the inflation rate. That is, if your interest rate is R and marginal tax rate is T, then you need R*(1-T) to be less than inflation to make a loan worth it. Lately inflation has been bouncing around between 1% and 1.8%. Let's assume a 25% tax rate. Is your interest rate lower than between 1.3% and 2.4%? If not, don't take out a loan. Another thing to consider: when you take out a loan you have to do a ton of extra stuff to make the lender happy (inspections, appraisals, origination charges, etc.). These really add up and are part of the closing costs as well as the time/trouble of buying a house. I recently bought my house using 100% cash. It was 2 weeks between when I agreed to a price to when the deal was sealed and my realtor said I probably saved about $10,000 in closing costs. I think she was exaggerating, but it was a lot of time and money I saved. My final closing costs were only a few hundred, not thousands, of dollars. TL;DR: Loans are for suckers. Avoid if possible.", "title": "" } ]	[ { "docid": "3eff2d19c29b1c7d18c9fb810330fac4", "text": "\"Welcome to Money.SE, and thank you for your service. In general, buying a house is wise if (a) the overall cost of ownership is less than the ongoing cost to rent in the area, and (b) you plan to stay in that area for some time, usually 7+ years. The VA loan is a unique opportunity and I'd recommend you make the most of it. In my area, I've seen bank owned properties that had an \"\"owner occupied\"\" restriction. 3 family homes that were beautiful, and when the numbers were scrubbed, the owner would see enough rent on two units to pay the mortgage, taxes, and still have money for maintenance. Each situation is unique, but some \"\"too good to be true\"\" deals are still out there.\"", "title": "" }, { "docid": "4358862e30f60df862722f91cef19815", "text": "The Homebuyers Tax Credit was unrelated to whether or not a mortgage was part of the purchase. You will have no issue with this credit if you refinance.", "title": "" }, { "docid": "8c881aed8e19835da2ab6e495d3b490d", "text": "It is normally a bad idea to cash in retirement accounts to buy a house, in your case it is a horrible idea because you are way behind on saving for retirement. Other fallacies in your reasoning: My advice, increase the amount you are saving for retirement considerably, and also put some money aside to save for a down payment on a house. Buy the house when you have enough non-retirement money to afford the down payment. If you can't wait that long, buy a house you can afford. It may help to think of it this way: Visualize yourself as a 65 year old retired person with very little income, and living on your retirement account. Would you as a 39 year old ask that person to give you $175,966 (the amount you are talking about withdrawing compounded annually at 6% interest for 25 years with no additional contributions) so that you could put a down payment on a house? Because that is what you would be doing. When you hit retirement age would you kick yourself for making such a decision? Because unless you die young, that person is sitting out there in your future needing that money to live off of. Don't take this the wrong way, but the tone of your question seems like you are looking for support to make what you already know is a bad financial decision.", "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": "f86aff035b0ccc3e9a474f3878d5a5d1", "text": "\"If you are investing in a mortgage strictly to avoid taxes, the answer is \"\"pay cash now.\"\" A mortgage buys you flexibility, but at the cost of long term security, and in most cases, an overall decrease in wealth too. At a very basic level, I have to ask anyone why they would pay a bank a dollar in order to avoid paying the government 28 - 36 cents depending on your tax rate. After all, one can only deduct interest- not principal. Interest is like rent, it accrues strictly to the lender, not equity. In theory the recipient should be irrelevant. If you have a need to stiff the government, go ahead. Just realize you making a banker three times as happy. Additionally the peace of mind that comes from having a house that no banker can take away from you is, at least for me, compelling. If I have a $300,000 house with no mortgage, no payments, etc. I feel quite safe. Even if my money is tied up in equity, if a serious situation came along (say a huge doctors bill) I always have the option of a reverse mortgage later on. So, to directly counter other claims, yes, I'd rather have $300k in equity then $50k in equity and $225k in liquid assets. (Did you notice that the total net worth is $25k less? And that's even before one considers the cash flow implication of a continuing mortgage. I have no mortgage, and I'm 41. I have a lot of net worth, but the thing that I really like is that I have a roof over my head that no on e can take away from me, and sufficient savings to weather most crises). That said, a mortgage is not about total cost. It is about cash flow. To the extent that a mortgage makes your cash flow situation better, it provides a benefit- just not one that is quantifiable in dollars and cents. Rather, it is a risk/reward situation. By taking a mortgage even when you have the cash, you pay a premium (the interest rate) in order to have your funds available when you need it. A very simple strategy to calculate and/or minimize this risk would be to invest the funds in another investment. If your rate of return exceeds the interest rate minus any tax preference (e.g. 4% minus say a 25% deduction = 3%), your money is better off there, obviously. And, indeed, when interest rates are only 4%, it may may be possible to find that. That said, in most instances, a CD or an inflation protected bond or so won't give you that rate of return. There, you'd need to look at stocks- slightly more risky. When interest rates are back to normal- say 5 or 6%, it gets even harder. If you could, however, find a better return than the effective interest rate, it makes the most sense to do that investment, hold it as a hedge to pay off the mortgage (see, you get your security back if you decide not to work!), and pocket the difference. If you can't do that, your only real reason to hold the cash should be the cash flow situation.\"", "title": "" }, { "docid": "593cbd452c7286b4358b8973a7511d16", "text": "\"First off, the \"\"mortgage interest is tax deductible\"\" argument is a red herring. What \"\"tax deductible\"\" sounds like it means is \"\"if I pay $100 on X, I can pay $100 less on my taxes\"\". If that were true, you're still not saving any money overall, so it doesn't help you any in the immediate term, and it's actually a bad idea long-term because that mortgage interest compounds, but you don't pay compound interest on taxes. But that's not what it actually means. What it actually means is that you can deduct some percentage of that $100, (usually not all of it,) from your gross income, (not from the final amount of tax you pay,) which reduces your top-line \"\"income subject to taxation.\"\" Unless you're just barely over the line of a tax bracket, spending money on something \"\"tax deductible\"\" is rarely a net gain. Having gotten that out of the way, pay down the mortgage first. It's a very simple matter of numbers: Anything you pay on a long-term debt is money you would have paid anyway, but it eliminates interest on that payment (and all compoundings thereof) from the equation for the entire duration of the loan. So--ignoring for the moment the possibility of extreme situations like default and bank failure--you can consider it to be essentially a guaranteed, risk-free investment that will pay you dividends equal to the rate of interest on the loan, for the entire duration of the loan. The mortgage is 3.9%, presumably for 30 years. The car loan is 1.9% for a lot less than that. Not sure how long; let's just pull a number out of a hat and say \"\"5 years.\"\" If you were given the option to invest at a guaranteed 3.9% for 30 years, or a guaranteed 1.9% for 5 years, which would you choose? It's a no-brainer when you look at it that way.\"", "title": "" }, { "docid": "26cbf718ff59fcc3d6dcab61bda540c0", "text": "I just read through all of the answers to this question and there is an important point that no one has mentioned yet: Oftentimes, buying a house is actually cheaper than renting the identical house. I'm looking around my area (suburbs of Chicago, IL) in 2017 and seeing some houses that are both for sale and for rent, which makes for an easy comparison. If I buy the house with $0 down (you can't actually put $0 down but it makes the numerical comparison more accurate if you do), my monthly payment including mortgage (P+I), taxes, insurance, and HOA, is still $400 less than the monthly rent payment. (If I put 20% down it's an even bigger savings.) So, in addition to the the tax advantages of owning a home, the locked in price that helps you in an economy that experiences inflation, and the accumulated equity, you may even have extra cash flow too. If you were on the fence when you would have had to pay more per month in order to purchase, it should be a no-brainer to buy if your monthly cost is lower. From the original question: Get a loan and buy a house, or I can live for the rest of my life in rent and save the extra money (investing and stuff). Well, you may be able to buy a house and save even more money than if you rent. Of course, this is highly dependent on your location.", "title": "" }, { "docid": "51f771d0d68bec8d965bfb3b2a9ee24e", "text": "avoid corporation tax There aren't many avenues to save on corporation tax legally. The best option you can try is paying into a generous pension for yourself, which will save some corporation tax. Buying a house You can claim deduction for the mortgage payments, but profits on selling the house will require paying capital gains tax on the profit. You can rent it out, this will be decided between your mortgage provider and your company, but the rent will go towards as income. Buying a car Not worth it. You will have to pay Class 1A NI contribution for benefits in kind. Any sane accountant will ask you to buy the car yourself and expense the mileage. Any income generated from the cash you have is taxable. Even the interest being paid on your money is taxable.", "title": "" }, { "docid": "204d55f8c36a9b2fff3dd7a5adc210d5", "text": "Unless you have an actual hardship (bankruptcy or other emergency), you will be better off leaving that money alone. This excellent answer, gives more than enough reasons why a withdrawal or loan is not recommended. I would love some advice because I need to know if I should contribute more into my 401k or less. If your priority to purchase is high enough, it may be worth considering stopping 401k contributions for a short time to help pile up a down payment. I also encourage you to consider that if you cannot pool the money from non-retirement sources, then you cannot afford that much house at this time. This might mean looking for cheaper houses or delaying purchase for a number of years.", "title": "" }, { "docid": "7e60d0a15a835c2018ef1b5193889378", "text": "First, as others have commented, the idea that getting a mortgage to buy a house is always a good idea is false. It depends on a number of factors including the current interest rate, what you think the future interest rate will do over the life of your mortgage, the relative cost of renting vs. buying, and how long you would stay in the house that you bought. To the extent that a mortgage for a house is more often recommended than buying other goods on credit, it is for these reasons: Except for #1 above, you could and can find other situations where taking a loan makes more sense than buying in cash. This more true if you have the resources and the skill to invest money at a rate that beats the interest rate you pay to the creditor. The general advice not to try this rests in the fact that most people don't have the resources or the skill to actually make this pay off, especially on high-interest rate loans or over short time periods.", "title": "" }, { "docid": "9743f3922210ecab0091b939ba07c985", "text": "A $500K mortgage at 4.5% is $2533, right near the $2500 in your example. Interest the first year would be less than $22K, and your tax benefit (taking littleadv's answer into account, of course) would be $5500, max. The tax benefit is the least of the reasons to get a mortgage. On your hypothetical $100K income, and too-high mortgage, a $5500 benefit is nothing. If one needs this tax benefit to make the numbers work, they are budgeted too tightly. If you are considering trading a $1000 rent for a $500K mortgage with a $2500 payment, I'd look very carefully at the numbers. Search this board for the associated expenses of homeownership.", "title": "" }, { "docid": "f7401b537f198afe92983962fc9b3061", "text": "My mortgage started out with an escrow, but it seemed like they were mismanaging it. They often over-collected it and locked up my money unnecessarily or under-collected and had to catch up later to pay the tax bill. Despite what Vitalik said, I told them I would pay my own taxes and insurance and to stop the escrow and they did without argument. Keep in mind, you should only do this if you are good about saving money. The banks know that many people aren't and will have trouble at the end of the year when a multi-thousand dollar tax or insurance bill comes due, hence the reason they try to get you to do the escrow. In my case, I just had the estimated tax/escrow amount automatically deposited from my paycheck into a special interest bearing savings account that I manage.", "title": "" }, { "docid": "aabcf90498394c77e1ceb55cb3be9619", "text": "If you withdraw money, even under a hardship clause like for purchasing a house, you'll still own taxes and a penalty on it. If you are talking about a 401K loan, a loan will have no taxes/penalty, but you'll repay the loan with after-tax reduction of your salary. Max is 50k or 50% of the balance. It maybe up to the 401K administrator whether all of the funds need to go to the down payment and closing costs or whether some can go towards renovations.", "title": "" }, { "docid": "b291f8354948f68c47bf9b69785c6131", "text": "The financial reasons, beyond simply owning your home outright, are: You're no longer paying interest. Yes, the interest is tax-deductible in the U.S. (though not in Canada), but the tax savings is a percentage of a percentage; if you paid, say, $8000 in interest last year, at the 25% marginal rate you effectively save $2000 off your taxes. But, if you paid off your home and had that $8000 in your pocket, you'd pay the $2000 in taxes but you'd have $6000 left over. Which is the better deal? In Canada, the decision gets even easier; you pay taxes on the interest money either way, so you're either spending the $8000 in interest, lost forever as cost of capital, or on other things. Whatever you're earning is going into your own pocket, not the bank's. Similar to the interest, but also including principal, a home you own outright is a mortgage payment you don't have to make. You can now use that money, principal and interest, for other things. Whether these advantages outweigh those of anything else you could do with a few hundred grand depends primarily on the rate of return. If you got in at the bottom of the mortgage crisis (which is pretty much right now) and got a rate in the 3-4% range, with no MIP or other payment on top, then almost anything you can do with the amount you'd need to pay off a mortgage principal would get you a better rate of return. However, you'll need some market savvy to avoid risks. In most cases when someone has pretty much any debt and a big wad of cash they're considering how to spend, I usually recommend paying off the debt, because that is, in effect, a risk-free way to increase the net rate of return on your total wealth and income. Balancing debt with investments always carries with it the risk that the investment will fail, leaving you stuck with the debt. Paying the debt on the other hand will guarantee that you don't have to pay interest on that outstanding amount anymore, so it's no longer offsetting whatever gains you are making in the market on your savings or future investments.", "title": "" }, { "docid": "1021105f9b691a94f55193b46aa9d692", "text": "Lets do the math, using your numbers. We start off with $100K, a desire to buy a house and invest, and 30 years to do it. Scenario #1 We buy a house for $100K mortgage at 5% interest over 30 years. Monthly payment ends up being $536.82/month. We then take the $100K we still have and invest it in stocks, earning an average of 9% annually and paying 15% taxes. Scenario #2 We buy a house for our $100K cash, and then, every month, we invest the $536.82 we would have paid for the mortgage. Again, investments make 9% annually long term, and we pay 15% taxes. How would it look in 30 years? Scenario #1 Results: 30 years later we would have a paid off house and $912,895 in investments Scenario #2 Results: 30 years later we would have a paid off house and $712,745 in investments Conclusion: NOT paying off your mortgage early results in an additional $200,120 in networth after 30 years. That's 28% more. Therefore, not paying off your mortgage is the superior scenario. Caveats/Notes/Things to consider Play with the numbers yourself:", "title": "" } ]	fiqa
f6bb38a1b63cda5266a8e37025aa5406	Are online mortgage lenders as good as local brick-and-mortar ones?	[ { "docid": "1562d113a58d1be0c38e839c2068a765", "text": "I had a pretty good experience with Lending Tree, although they are a mortgage broker, not a lender themselves.", "title": "" }, { "docid": "4ed3141d1ecdbd5a18ae6b853bebb70d", "text": "At least five of my co-workers are currently re-financing through Amerisave. Four have had a wonderful experience. The fifth has been dealing with a representative who constantly misunderstands him, asks for duplicate paperwork, and is in general fairly annoying to deal with. He is willing to go through the hassle because he found the lowest rates through them. All five co-workers recommend Amerisave despite this one co-worker's difficulties. Another person I know has refinanced through mortgagefool.com twice with good results. In general I think online lenders are like brick and mortar lenders in that some will be good, some will be not-so-good.", "title": "" } ]	[ { "docid": "e24bf7a39a85a27540fd6df3267e7eb0", "text": "\"Excellent question. I'm not aware of one. I was going to say \"\"go visit some personal finance blogs\"\" but then I remembered that I write on one, and that I often get a commission if I talk about online accounts, so unless something is really bad I'm not going to post on it because I want to make money, not chase it away. This isn't to say that I'm biased by commissions, but among a bunch of online banks paying pretty much the same (crappy) interest rate and giving pretty much the same (often not crappy) service, I'm going to give air time to the ones that pay the best commissions. That, and some of the affiliate programs would kick me out if I trashed them on my blog. This also would taint any site, blog or not, that does not explicitly say that they do not have affiliate relationships with the banks they review. I suppose if you read enough blogs you can figure out the bad ones by their absence, but that takes a lot of time. Seems like you'd do all right by doing a \"\"--bank name-- sucks\"\" Google search to dig up the dirt. That, or call up / e-mail / post on their forum any questions you have about their services before sending them your money. If they're up front, they'll answer you.\"", "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": "77509b644e1d0e4ad5a936133c0a9d39", "text": "Yes, maybe for themselves, but for you that depends on quite a number of things. But not all advisors are scum, but accept the fact that you are their cash cow and you are there for their takings. Some advisors are true to their professions and advise ethically, trying to get the best for their clients. So search for a good advisor rather than a cheap one. And regarding the mortgage you are talking about, the mortgage provider and the mortgage taker don't deal directly, but use their solicitors. Every party wants the least of legal hassles for their transactions and get the best legal help. The financial advisor maybe both rolled into one or he has legal practitioners in his firm who would do the legal job after he takes care of the financial matters. Seems a cost effective workshop.", "title": "" }, { "docid": "3d0fe3e6e7002ef41d8402ddc82e230d", "text": "\"In practical terms, these days, a credit union IS a small \"\"savings and loan\"\" bank -- the kind of bank that used to exist before bankers started making money on everything but writing loans. They aren't always going to offer higher interest and/or cheaper loans than the bank-banks, but they're almost always going to be more pleasant to deal with since they consider the depositors and borrowers their stockholders, not just customers. There are minor legal differences (different insurance fund, for example), and you aren't necessarily eligible to open an account at a randomly-chosen credit union (depending on how they've defined the community they're serving), but they will rarely affect you as an account holder. The main downside of credit unions is that, like other small local banks, they will only have a few branches, usually within a limited geographic area. However, I've been using a credit union 200 miles away (and across two state lines on that route, one if I take a large detour) for decades now, and I've found that between bank-by-mail, bank-by-internet, ATM machines, and the \"\"branch exchange\"\" program (which lets you use branches of participating credit unions as if they were branches of your own) I really haven't felt a need to get to the branch. I did find that, due to network limitations of $50K/CU/day, drawing $200,000 worth of bank checks on a single day (when I purchased the house) required running around to four separate branch-exchange credit unions. But that's a weird situation where I was having trouble beating the actual numbers out of the real estate agents until a few days before the sale. And they may have relaxed those limitations since... though if I had to do it again, I'd consider taking a scenic drive to hit an actual branch of my own credit union. If you have the opportunity to join a credit union, I recommend doing so. Even if you don't wind up using it for your \"\"main\"\" accounts, they're likely to be people you want to talk to when you're shopping for a loan.\"", "title": "" }, { "docid": "1707e391b50fb6601344bdb077f3ff93", "text": "I think it's smart. It's the same game, just stiffer regulations, so your lender will ask more from you. Buy if you... If someone has been saving for years and years and still can't put 20% down, I think they're taking a significant risk. Buy something where your mortgage payment is around one week's salary at most. Try to buy only what you can afford to live in if you lost your job and couldn't find work for 3-6 months. You might want to do a 30-yr fixed instead of a 15-yr if you're worried about cash-flow.", "title": "" }, { "docid": "48de34f089ed41e9bfb95dfaa3c87636", "text": "\"The mortgage broker makes money from the mortgage originator, and from closing fees. All the broker does is the grunt work, mostly paperwork and credit record evaluation. But there's a lot of it. They make their money by navigating the morass of regulations (federal, state, local) and finding you the best mortgage from the mortgage lender(s) they represent. They don't have any capital involved in the deal. Just sweat equity. Mortgage originator is the one who put up the capital for you to borrow. They're the ones who get most of the payments you send in. They sell the mortgage if they receive what they consider an equitable offer. Keep in mind that the mortgage, from the lender's point of view, is made up of three parts. The capital expenditure, the collateral, and the cashflow. The present value of the cashflow at the rate of the loan is greater than the capital expenditure. Any offer between those two numbers is 'in the money' for them, and the next owner, assuming no default. But the collateral makes up for the chance of default, to an extent. There's also a mortgage servicing company in many cases. This doesn't have to be the current holder of the loan. Study \"\"the time value of money\"\", and pay close attention to the parts about present value, future value, and cash flow and how to compare these.\"", "title": "" }, { "docid": "6216c82a3e886b3a0bbedc9202cbea4a", "text": "\"I experimented with Lending Club, lending a small amount of money in early 2008. (Nice timing right - the recession was December 2007 to June 2009.) I have a few loans still outstanding, but most have prepaid or defaulted by now. I did not reinvest as payments came in. Based on my experience, one \"\"catch\"\" is lack of liquidity. It's like buying individual bonds rather than a mutual fund. Your money is NOT just tied up for the 3-year loan term, because to get good returns you have to keep reinvesting as people pay off their loans. So you always have some just-reinvested money with the full 3 year term left, and that's how long it would take to get all your money back out. You can't just cash out when you feel like it. They have a trading platform (which I did not try out) if you want your money sooner, but I would guess the spreads are wide and you have to take a hit when you sell loans. Again though I did not try the trading platform. On the upside, the yields did seem fine. I got 19 eventual defaults from 81 loans, but many of the borrowers made a number of payments before defaulting so only part of the money was lost. The lower credit ratings default more often obviously, only one of 19 defaults had the top credit score. (I tried investing across a range of credit ratings.) The interest rates appear to cover the risk of default, at least on average. You can of course have varying luck. I made only a slight profit over the 3 years, but I did not reinvest after the first couple months, and it was during a recession. So the claimed yields look plausible to me if you reinvest. They do get people's credit scores, report nonpayment on people's credit reports, and even send people to collections. Seems like borrowers have a reason to pay the bill. In 2008 I think this was a difference compared to the other peer lending sites, but I don't know if that's still true. Anyway, for what it's worth the site seemed to work fine and \"\"as advertised\"\" for me. I probably will not invest more money there for a couple reasons: However as best I could tell from my experiment, it is a perfectly reasonable place to put a portion of your portfolio you might otherwise invest in something like high-yield bonds or some other sub-investment-grade fixed income. Update: here's a useful NY Times article: http://www.nytimes.com/2011/02/05/your-money/05money.html\"", "title": "" }, { "docid": "0a8e98b568067901bf114c8c52a8bf27", "text": "While it is possible, it's not a really good use of your time or theirs. Mortgage brokers have access to dozens of lenders, can assemble deals you can't even dream of, and are much more intimately acquainted with the latest lending rule changes than you are. They are paid by the lenders to bring them business, so there is no cost to you. A mortgage broker has the advantage of leverage because he can be placing 10 mortgages per day, while you will be placing one, once. Your mortgage broker is working on your behalf. Get out of his way and let him do his job so you can concentrate on other matters. If your concern is that you want the lowest rate, share that with your broker and let him find the best rate for you. If you want a deal where you can put a larger prepayment down, let him know that and he will find you what you're looking for.", "title": "" }, { "docid": "4207706b7befff87a3e630d6454003ed", "text": "\"The reason \"\"on-line\"\" savings accounts (Ally, CapitalOne, American Express, and many others) provide much higher rates than brick-and-mortar banks is because they're not brick-and-mortar. They do not need to pay for a huge amount of real estate, utilities, public-facing employees, inter-office mail, security, etc etc. All that - allows them to pay more for your money. The back office of these banks is the same as that of Chase, BOA or Wells Fargo. Its just that they don't have the enormous expense of having a branch in every neighborhood, while still reaching all the same population of depositors. So no, its not a scam, these are reputable banks. Some have physical offices (for example, I know that CapitalOne has some branches in New York), some don't (IIRC neither Ally nor American Express Federal Saving Bank have physical branches). But they're banks nonetheless, insured as required by FDIC (or NCUA, in case of credit unions), and provide all the same services for less (or all the same savings for more, if you will). IMHO, giving 0.01% APR is a scam. Not the other way around. The old-style banks want your money for free, and you're worried why would someone else treat you better... Well, that's why the US has one of the most retarded financial systems in the Western world...\"", "title": "" }, { "docid": "9f4963fce4cb631d814a5851479c5bf4", "text": "\"Small community banks are absolutely vital to our economy. Plenty of people these days talk about \"\"buying local,\"\" but you never hear them talking about banking local. My friends, for the most part, lean left of center politically, so they constantly complain about Wal-Mart and other large brick and mortar chains, but when I called them out on their banking by asking them to pull out their debit cards, they all banked with larger banks; Chase, PNC, Key; the only person (beside myself) who didn't bank with a large national/multi - national bank uses Huntington, which is still a very large regional bank with over $100 billion in assets. They said they didn't want to have to pay ATM fees, to which I responded that many community banks will reimburse the customer for those fees up to a certain amount (like my bank does.) They just shrugged and said they liked the convenience of it, so I asked them why do they think people shop at Wal-Mart? I didn't really get a good answer to that; they just said \"\"it's different.\"\" The best way to invest in your community is to bank with a local community bank. Those mom and pop shops you love so much; the plumber who lives down the street; the micro brewery that just opened up all do their banking with the local community bank.\"", "title": "" }, { "docid": "9b9b6bd0da39b12ed4ac17e04daefd67", "text": "\"Here are the issues, as I see them - It's not that I don't trust banks, but I just feel like throwing all of our money into intangible investments is unwise. Banks have virtually nothing to do with this. And intangible assets has a different meaning than you assume. You don't have to like the market, but try to understand it, and dislike it for a good reason. (Which I won't offer here). Do your 401(k) accounts offer company match? When people start with \"\"we'd like to reduce our deposits\"\" that's the first thing we need to know. Last - you plan to gain \"\"a few hundred dollars a month.\"\" I bet it's closer to zero or a loss. I'll return to edit, we have recent posts here that reviewed the expenses to consider, and I'd bet that if you review the numbers, you've ignored some of them. \"\"A few hundred\"\" - say it's $300. Or $4000/yr. It would take far less work and risk to simply save $100K in your retirement accounts to produce this sum each year. The investment may very well be excellent. I'm just offering the flip side, things you might have missed. Edit - please read the discussion at How much more than my mortgage should I charge for rent? The answers offer a good look at the list of expenses you need to consider. In my opinion, this is one of the most important things. I've seen too many new RE investors \"\"forget\"\" about so many expenses, a projected monthly income reverts to annual losses.\"", "title": "" }, { "docid": "3b46cd1cd828458b9853b605028dc8a9", "text": "\"Your headline question \"\"How do you find best mortgage without damaging credit score?\"\" has a simple answer. If you have all your ducks in a row, and know what you are doing, you will get qualified. If you are like a recent client of mine, low FICO, low downpayment, random income, you might have issues. If your self-prequalification is good, you are in control, go find the best rate/ total cost, no need to put in multiple applications. If, for some reason you do, FICO sees that you are shopping for a single loan, and you are not dinged.\"", "title": "" }, { "docid": "88c45e03f8757aab8fc52372a58788df", "text": "I had the same experience as Jeremy: made investments in both Prosper and Lending Club and got a much better returns with Lending Club, although in my cases both investments were ok: after 18 months i made 4-5% on prosper and 11-12% on Lending Club. I think they just have better underwriting standards.", "title": "" }, { "docid": "609c715b134b85f0951fb29bdb2469e5", "text": "Most of these blogs/websites that you mention above promote banks that pay a commission and hence you never realize there are better banks out there that offer a higher rate. I went through the same exercise to find the bank that paid the best rate and realized the truth I mention above. I currently bank with Alliant Credit Union, which doesn't pay a commission or have affiliate fees. If you find a bank that pays a higher rate than ACU, let me know, I'd like to switch to that bank as well! To give an example, ACU's regular savings rate is equivalent to EverBank's 2 year CD! See what I mean when I say affiliate and commissions run the show? Disclosure: BTW, I'm a customer of this bank, not an employee. I do have a blog if you wish to read my experience with ACU.", "title": "" }, { "docid": "dae929d5d91dec429b8b506947c43c09", "text": "Applying for a mortgage is a bit of paperwork, but not too bad of an experience. Rates are pretty tight, if one lender were more that 1/4% lower than another, they'd be inundated with applications. Above a certain credit score, you get the 'best' rate, a search will show you the rates offered in your area. If you are a first time buyer, there are mortgages that might benefit you. If you are a vet (for non-native English readers, a veteran who served in the US armed forces, not a veterinarian, who is an animal doctor) there are mortgages that offer low-to-no down payment with attractive rates. Yes, avoid PMI, it's a crazy penalty on your overall expense of home purchase. If banks qualify you for different amounts, it shouldn't be a huge difference, a few percent variation. But, the standard ratios are pretty liberal even today, and getting the most you'd qualify for is probably too much. Using the standard 28/36% ratios, a bank will qualify you for 4X your income as a loan. e.g you make $50K, they'll lend you $200K. This is a bit too much in my opinion. If you come up short, you are really looking to borrow too much, and should probably wait. If you owe a bit on loans, it should squeeze in between those two ratios, 28/36. But I wouldn't borrow on a credit line to add to the purchase, that's asking for trouble.", "title": "" } ]	fiqa
ffd49e20b28c14050ee8bd64e585cffb	How to determine duration of a common stock whose dividends grow in perpetuity?	[ { "docid": "df51baa716fa4162186729d8475b8167", "text": "\"The Dividend Discount Model is based on the concept that the present value of a stock is the sum of all future dividends, discounted back to the present. Since you said: dividends are expected to grow at a constant rate in perpetuity ... the Gordon Growth Model is a simple variant of the DDM, tailored for a firm in \"\"steady state\"\" mode, with dividends growing at a rate that can be sustained forever. Consider McCormick (MKC), who's last dividend was 31 cents, or $1.24 annualized. The dividend has been growing just a little over 7% annually. Let's use a discount, or hurdle rate of 10%. MKC closed today at $50.32, for what it's worth. The model is extremely sensitive to inputs. As g approaches r, the stock price rises to infinity. If g > r, stock goes negative. Be conservative with 'g' -- it must be sustainable forever. The next step up in complexity is the two-stage DDM, where the company is expected to grow at a higher, unsustainable rate in the early years (stage 1), and then settling down to the terminal rate for stage 2. Stage 1 is the present value of dividends during the high growth period. Stage 2 is the Gordon Model, starting at the end of stage 1, and discounting back to the present. Consider Abbott Labs (ABT). The current annual dividend is $1.92, the current dividend growth rate is 12%, and let's say that continues for ten years (n), after which point the growth rate is 5% in perpetuity. Again, the discount rate is 10%. Stage 1 is calculated as follows: Stage 2 is GGM, using not today's dividend, but the 11th year's dividend, since stage 1 covered the first ten years. 'gn' is the terminal growth, 5% in our case. then... The value of the stock today is 21.22 + 51.50 = 72.72 ABT closed today at $56.72, for what it's worth.\"", "title": "" }, { "docid": "7b98ebb079f0d5f8f570aa1aab78fe5b", "text": "\"The fact that dividends grow in perpetuity does not prevent one from calculating duration. In fact, many academic papers look at exactly this problem, such as Lewin and Satchell. This Wilmott thread discusses some of the pros and cons of the concept in some detail. PS: Although I was already broadly familiar with the literature and I use the duration of equities in some of my every-day work as a professional working in finance, I found the links above doing a simple google search for \"\"equity duration.\"\"\"", "title": "" } ]	[ { "docid": "743d2e65a512c9a50e965e0a1b4a80f0", "text": "\"Dividends telegraph that management has a longer term focus than just the end of quarter share price. There is a committment to at least maintain (if not periodically increase) the dividend payout year over year. Management understands that cutting or pausing dividends will cause dividend investors in market to dump shares driving down the stock price. Dividends can have preferential tax treatment in some jurisdictions, either for an individual compared to capital gains or compared to the corporation paying taxes themselves. For example, REITs (real estate investment trusts) are a type of corporation that in order to not pay corporate income tax are required to pay out 95% of income as dividends each year. These are not the only type, MLP (master limited partnerships) and other \"\"Partnership\"\" structures will always have high dividend rates by design. Dividends provide cash flow and trade market volatility for actual cash. Not every investor needs cash flow, but for certain investors, it reduces the risks of a liquidity crisis, such as in retirement. The alternative for an investor who seeks to use the sale of shares would be to maintain a sufficient cash reserve for typical market recessions.\"", "title": "" }, { "docid": "509035e481f4760683199a219b1375d9", "text": "\"If by saying you wish to invest \"\"for the long term 5-10 years\"\" I take it you mean to hold a stock for between 5-10 years. If this is the case, this is the fundamental flaw in your screening algorithm. No company stock price continues to go up without end for 5-10 years. The price of every company's stock goes down at some point. You have to decide on a company by company basis whether you want to ride out the downturn or sell and get out. This is a personal decision based on your own research. The list of screening criteria you list indicates you are looking for solid earnings companies. Try not to apply these rules rigidly because every company runs through a rough patch. At times past, GE (for example) met all of your criteria. However, in 2017, it would not and therefore would not meet your screening criteria. Would you sell GE if you owned it? Maybe, or maybe you would hold through the downturn. The same be said for MSFT in 2010 or AAPL pre-Jobs return. A rule you may want to add to your list: know the company business well; that is, don't invest in companies you have no understanding of their business model.\"", "title": "" }, { "docid": "80a85c95c7462ad01c4b710df507a311", "text": "\"Hello! I am working on a project where I am trying to determine the profit made by a vendor if they hold our funds for 5 days in order to collect the interest on those funds during that period before paying a third party. Currently I am doing \"\"Amount x(Fed Funds Rate/365)x5\"\" but my output seems too low. Any advice?\"", "title": "" }, { "docid": "b1bc62cb643f486e533c3927d4cf9cd7", "text": "The real value of a share of stock is the current cash value of all dividends the owner will receive, plus the current cash value of the final liquidation if any. Since people with different needs may judge the current cash value of an income stream differently, there would be a market basis for people to buy and sell stocks even if everyone could predict all future payouts perfectly. If shareholders knew that a company wouldn't pay any dividends until it was liquidated in the year 2066, whereupon it would pay $2000/share, then each share would in 2016 effectively be a fifty-year zero-coupon bond with a $2000 maturity value. While some investors would be willing to trade in such an instrument, the amount of money a company could charge for such an instrument would be far lower than the money it could charge for one with payouts that were more evenly distributed through time. Since the founders of most companies want their companies to be around for a long time, that would mean that shareholders would have no expectation of their shares ever yielding anything of value within any foreseeable timeframe. Even those who would be more interested in share-price appreciation than dividends wouldn't be able to see share prices rise if there wasn't any likelihood of the stock being bought by someone who wanted the dividends.", "title": "" }, { "docid": "8331c07f3c8f33cb5083b8dd9bff0e5e", "text": "The owner of a long futures contract does not receive dividends, hence this is a disadvantage compared to owning the underlying stock. If the dividend is increased, and the future price would not change, there is an arbitrage possibility. For the sake of simplicity, assume that the stock suddenly starts paying a dividend, and that the risk free rate is zero (so interest does not play a role). One can expect that the future price is (rougly) equal to the stock price before the dividend announcment. If the future price would not change, an investor could buy the stock, and short a futures contract on the stock. At expiration he has to deliver the stock for the price set in the contract, which is under the assumptions here equal to the price he bought the stock for. But because he owned the stock, he receives the announced dividend. Hence he can make a risk-free profit consisting of the divivends. If interest do play a role, the argument is similar.", "title": "" }, { "docid": "33e1168b647035deb672a2797e3a6afe", "text": "\"Your company actually will most likely use some sort of options pricing model, either a binomial tree or black-scholes to determine the value for their accounting and, subsequently, for their issuance and realization. First, market value of equity will be determined. Given you're private (although \"\"pre-IPO could mean public tomorrow,\"\"), this will likely revolve around a DCF and/or market approaches. Equity value will then be compared to a cap table to create an equity waterfall, where the different classes of stock and the different options will be valued along tranches. Keep in mind there might be liquidation preferences that would make options essentially further out of the money. As such, your formulae above do not quite work. However, as an employee, it might be difficult to determine the necessary inputs to determine value. To estimate it, however, look for three key pieces of information: 1. Current equity value 2. Option strike price 3. Maturity for Options If the strike is close to the current equity value, and the maturity is long enough, and you expect the company to grow, then it would look like the options have more value than not. Equity value can be derived from enterprise value, or by directly determining it via a DCF or guideline multiples. Reliable forecasts should come from looking at the industry, listening to what management is saying, and then your own information as an insider.\"", "title": "" }, { "docid": "818e4c0014c78e9b1e1f2d31529ae8ab", "text": "You simply add the dividend to the stock price when calculating its annual return. So for year one, instead of it would be", "title": "" }, { "docid": "47ae54c33da604d2225616426525aae9", "text": "EDIT: After reading one of the comments on the original question, I realized that there is a much more intuitive way to think about this. If you look at it as a standard PV calculation and hold each of the cashflows constant. Really what's happening is that because of inflation the discount rate isn't the full value of the interest rate. Really the discount rate is only the portion of the interest rate above the inflation rate. Hence in the standard perpetuity PV equation PV = A / r r becomes the interest rate less the inflation rate which gives you PV = A / (i - g). That seems like a much better way to get to the answer than all the machinations I was originally trying. Original Answer: I think I finally figured this out. The general term for this type of system in which the payments increase over time is a gradient series annuity. In this specific example since the payment is increasing by a percentage each period (not a constant rate) this would be considered a geometric gradient series. According to this link the formula for the present value of a geometric gradient series of payments is: Where P is the present value of this series of cashflows. A_1 is the initial payment for period 1 (i.e. the amount you want to withdraw adjusted for inflation). g is the gradient or growth rate of the periodic payment (in this case this is the inflation rate) i is the interest rate n is the number of payments This is almost exactly what I was looking for in my original question. The only problem is this is for a fixed amount of time (i.e. n periods). In order to figure out the formula for a perpetuity we need to find the limit of the right side of this equation as the number of periods (n) approaches infinity. Luckily in this equation n is already well isolated to a single term: (1 + g)^n/(1 + i)^-n}. And since we know that the interest rate, i, has to be greater than the inflation rate, g, the limit of that factor is 0. So after replacing that term with 0 our equation simplifies to the following: Note: I don't do this stuff for a living and honestly don't have a fantastic finance IQ. It's been a while since I've done any calculus or even this much algebra so I may have made an error in the math.", "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": "2ed3c177786d18301727f0854afccc2d", "text": "\"In the USA there are two ways this situation can be treated. First, if your short position was held less than 45 days. You have to (when preparing the taxes) add the amount of dividend back to the purchase price of the stock. That's called adjusting the basis. Example: short at $10, covered at $8, but during this time stock paid a $1 dividend. It is beneficial for you to add that $1 back to $8 so your stock purchase basis is $9 and your profit is also $1. Inside software (depending what you use) there are options to click on \"\"adjust the basis\"\" or if not, than do it manually specifically for those shares and add a note for tax reviewer. Second option is to have that \"\"dividednd payment in lieu paid\"\" deducted as investment expence. But that option is only available if you hold the shorts for more than 45 days and itemize your deductions. Hope that helps!\"", "title": "" }, { "docid": "0e6c1f7efce6057935896af1d891ccbe", "text": "A futures contract is based upon a particular delivery date. In the case of a stock index futures contract is a cash settled futures contract based upon the stock index value at a particular point in time (i.e. this is when the final settlement is determined). In your example, the S&P 500 (SPX) is a price return index - that is, it is not affected by dividends and therefore dividends are not incorporated into the index value. Dividends will affect the price of the constituent stocks (not necessarily by the same amount as the dividend) so they do have influence on the stock index value. Since the dividends are known ahead of time (or at least can be estimated), this has already been factored into the futures price by the market. In terms of the impact of a dividend by AAPL, AAPL is approximaetely 3.6% of the index. Apple pays out dividends 4 times a year (currently paying out $0.52 dividends). Assuming the market is otherwise steady and AAPL drops by $0.52 due to the dividend and Apple is priced at around $105, this would result in a drop in the index of 0.0178% or around 0.35 points. Interesting fact: There are some futures contracts that are based upon Total Return indexes, such as the German DAX and the above logic would need to be reversed.", "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": "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): (70-1Vc)(e^(0.055(12/12))) = (75.38-115.38) => (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^(rt)-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 = [(0.86260710715.38)+(0.1373928935)]/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": "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": "7899255b9d21c5e86212fdc9fb628c00", "text": "\"The other two folks here are right with the math and such, so I'll just throw some intuition out there for you. The basis for this valuation model is really just tacking the Gordon growth model (which is really just a form of valuing a perpetuity) onto a couple of finite discounted cash flows. So that ending part is the Gordon growth model at the future point* discounted back to the present. The Gordon growth model uses a \"\"next period\"\" dividend for the very simple reason that it's the next one you'd get if you bought the stock. Is that explanation clear enough, or were some of these points not adequately explained in your class? I'll help a bit more, if I can.\"", "title": "" } ]	fiqa
81fe2d6171af6be5bb5db6c1d47261de	I'm 23 and was given $50k. What should I do?	[ { "docid": "7976ebac42b29cd1cffa0d98f24be429", "text": "Here are some possibilities: avoid buying a car for as long as you can; if forced to own one, buy a used dependable car like a Toyota Corolla- 4 cyl and don't abuse it. open a Roth IRA, depositing max possible, the plan on doing so until you've investing the remaining balance. A Roth IRA, while not tax deductible now (you're in a low tax bracket now) will provide for tax-free distributions when you are both older and not in a low bracket. of course, invest in low cost equity funds. Come back for more ideas once the dust settles, you've got money left over and some of the above accomplished. You've got one asset many of us don't have: time.", "title": "" }, { "docid": "605842993bf7c451b0f12c45806e8a78", "text": "First, I would point you to this question: Oversimplify it for me: the correct order of investing With the $50k that you have inherited, you have enough money to pay off all your debt ($40k), purchase a functional used car ($5k), and get a great start on an emergency fund with the rest. There are many who would tell you to wait as long as possible to pay off your student loans and invest the money instead. However, I would pay off the loans right away if I were you. Even if it is low interest right now, it is still a debt that needs to be paid back. Pay it off, and you won't have this debt hanging over your head anymore. Your grandmother has given you an incredible gift. This money can make you completely debt free and put you on a path for success. However, if you aren't careful, you could end up back in debt quickly. Learn how to make a budget, and commit to never spending money that you don't have again.", "title": "" }, { "docid": "5b740b898731a15a46298c807c24c05d", "text": "\"I'll add 2 observations regarding current answers. Jack nailed it - a 401(k) match beats all. But choose the right flavor account. You are currently in the 15% bracket (i.e. your marginal tax rate, the rate paid on the last taxed $100, and next taxed $100.) You should focus on Roth. Roth 401(k) (and if any company match, that goes into a traditional pretax 401(k). But if they permit conversions to the Roth side, do it) You have a long time before retirement to earn your way into the next tax bracket, 25%. As your income rises, use the deductible IRA/ 401(k) to take out money pretax that would otherwise be taxed at 25%. One day, you'll be so far into the 25% bracket, you'll benefit by 100% traditional. But why waste the opportunity to deposit to Roth money that's taxed at just 15%? To clarify the above, this is the single rate table for 2015: For this discussion, I am talking taxable income, the line on the tax return designating this number. If that line is $37,450 or less, you are in the 15% bracket and I recommend Roth. Say it's $40,000. In hindsight on should put $2,550 in a pretax account (Traditional 401(k) or IRA) to bring it down to the $37,450. In other words, try to keep the 15% bracket full, but not push into 25%. Last, after enough raises, say you at $60,000 taxable. That, to me is \"\"far into the 25% bracket.\"\" $20,000 or 1/3 of income into the 401(k) and IRA and you're still in the 25% bracket. One can plan to a point, and then use the IRA flavors to get it dead on in April of the following year. To Ben's point regarding paying off the Student Loan faster - A $33K income for a single person, about to have the new expense of rent, is not a huge income. I'll concede that there's a sleep factor, the long tern benefit of being debt free, and won't argue the long term market return vs the rate on the loan. But here we have the probability that OP is not investing at all. It may take $2000/yr to his 401(k) capture the match (my 401 had a dollar for dollar match up to first 6% of income). This $45K, after killing the card, may be his only source for the extra money to replace what he deposits to his 401(k). And also serve as his emergency fund along the way.\"", "title": "" }, { "docid": "e20bda2b9348c44c284bb75dc8e4a975", "text": "If your employer is matching 50 cents on the dollar then your 401(k) is a better place to put your money than paying off credit cards This. Assuming you can also get the credit cards paid off reasonably soon too (say, by next year). Otherwise, you have to look at how long before you can withdraw that money, to see if the compounded credit card debt isn't growing faster than your retirement. But a guaranteed 50% gain, your first year is a pretty hard deal to beat. And if you currently have no savings, unless all of your surplus income has been reducing your debt, you're living beyond your means. You should be earning more than you're (going to be) spending, when you start paying rent/car bills. If you don't know what this is going to be, you need to be budgeting. Get this under control, by any means necessary. New job/career? Change priorities/expectations? Cut expenses? Live to your budget? Whatever it takes. I don't think you should be in any investment that includes bonds until you're 40, and maybe not even then - equities and cash-equivalents all the way (cash is for emergency funds, and for waiting for buying opportunities). Otherwise Michael has some good ideas. I would caveat that I think you should not buy any investments in one chunk, but dollar average it over some period of time, in case the market is unnaturally high right when you decide to invest. You should also gauge possible returns and potential tax liabilities. Debt is good to get rid of, unless it is good debt (very low interest rates - ie: lower than you could borrow the money for). Good debt should still get paid off - who knows how long your job could last for - but maybe not dump all of your $50K on it. Roth is amazing. You should be maxing that contribution out every year.", "title": "" }, { "docid": "ac87ed2ce4077b4e61e5806d7671fd6f", "text": "To add to @michael's solid answer, I would suggest sitting down and analyzing what your priorities are about paying off the student loan debt versus investing that money immediately. (Regardless, the first thing you should do is, as michael suggested, pay off the credit card debt) Since it looks like you will be having some new expenses coming up soon (rent, possibly a new car), as part of that prioritization you should calculate what your rent (and associated bills) will cost you on a monthly basis (including saving a bit each month!) and see if you can afford to pay everything without incurring new debt. I'd recommend trying to come up with several scenarios to see how cheaply you can live (roommates, maybe you can figure out a way to go without a car, etc). If, for whatever reason, you find you can't afford everything, then I would suggest taking a portion of your inheritance to at least pay off enough of your student loans so that you can afford all of your costs per month, and then save or invest the rest. (You can invest all you like, but if you don't live within your means, it won't do you any good.) Finally -- be aware that you may have other factors that come into play that may override financial considerations. I found myself in a situation similar to yours, and in my case, I chose to pay off my debts, not because it necessarily made the best financial sense, but that because of those other considerations, paying off that debt meant I had a significant level of stress removed from my life, and a lot more peace of mind.", "title": "" }, { "docid": "d41d8cd98f00b204e9800998ecf8427e", "text": "", "title": "" }, { "docid": "db8106cfd7ef5fa80480e89e21f6f2c1", "text": "The best option for maximizing your money long-term is to contribute to the 401(k) offered by your employer. If you park your inheritance in a savings account you can draw on it to augment your income while you max out your contributions to the 401(k). You will get whatever the employer matches right off the bat and your gains are tax deferred. In essence you will be putting your inheritance into the 401(k) and forcing your employer to match at whatever rate they do. So if your employer matches at 50 cents on the dollar you will turn your 50 thousand into 75 thousand.", "title": "" }, { "docid": "4a911181137582e6d96fe11409fd5e1b", "text": "First of all, I am sorry for your loss. At this time, worrying about money is probably the least of your concerns. It might be tempting to try to pay off all your debts at once, and while that would be satisfying, it would be a poor investment of your inheritance. When you have debt, you have to think about how much that debt is costing you to keep open. Since you have 0%APR on your student loan, it does not make sense to pay any more than the minimum payments. You may want to look into getting a personal loan to pay off your other personal debts. The interest rates for a loan will probably be much less than what you are paying currently. This will allow you to put a payment plan together that is affordable. You can also use your inheritance as collateral for the loan. Getting a loan will most likely give you a better credit rating as well. You may also be tempted to get a brand new sports car, but that would also not be a good idea at all. You should shop for a vehicle based on your current income, and not your savings. I believe you can get the same rates for an auto loan for a car up to 3 years old as a brand new car. It would be worth your while to shop for a quality used car from a reputable dealer. If it is a certified used car, you can usually carry the rest of the new car warranty. The biggest return on investment you have now is your employer sponsored 401(k) account. Find out how long it takes for you to become fully vested. Being vested means that you can leave your job and keep all of your employer contributions. If possible, max out, or at least contribute as much as you can afford to that fund to get employee matching. You should also stick with your job until you become fully vested. The money you have in retirement accounts does you no good when you are young. There is a significant penalty for early withdrawal, and that age is currently 59 1/2. Doing the math, it would be around 2052 when you would be able to have access to that money. You should hold onto a certain amount of your money and keep it in a higher interest rate savings account, or a money market account. You say that your living situation will change in the next year as well. Take full advantage of living as cheaply as you can. Don't make any unnecessary purchases, try to brown bag it to lunch instead of eating out, etc. Save as much as you can and put it into a savings account. You can use that money to put a down payment on a house, or for the security and first month's rent. Try not to spend any money from your savings, and try to support yourself as best as you can from your income. Make a budget for yourself and figure out how much you can spend every month. Don't factor in your savings into it. Your savings should be treated as an emergency fund. Since you have just completed school, and this is your first big job out of college, your income will most likely improve with time. It might make sense to job hop a few times to find the right position. You are much more likely to get a higher salary by changing jobs and employers than you are staying in the same one for your entire career. This generally is true, even if you are promoted at the by the same employer. If you do leave your current job, you would lose what your employer contributed if you are not vested. Even if that happened, you would still keep the portion that you contributed.", "title": "" }, { "docid": "080056d630bff8fef41c2b47594e2d9a", "text": "I'd be tempted to pay off the 35k in student loans immediately, but if you have to owe money, it's hard to beat zero percent. So I don't think I would pay it all off. Maybe cut it in half to make it a more comfortable payment. Currently, you are looking at $6K a year to pay them off, which is about 20% of your income. Cut that in half and you will sleep better! Definitely pay off the medical and credit cards. You're probably paying 20% on that. Clean it up. If you need a car, buy yourself a car. You have no savings, so I would put the rest in some kind of money market savings account. You are at an age where many people go through frequent changes. Maybe you get your own place, and you'll need to furnish it. Maybe you go back to school. Maybe you get married or have kids. Maybe you take a year off and backpack through Europe or Asia. You have a nice little windfall that puts you in a nice position to enjoy being young, so I would not lock it up into a 401k or other long term situation.", "title": "" }, { "docid": "3fcd316ac05b8ae0bdeabc00453d5ab6", "text": "Wow, hard to believe not a single answer mentioned investing in one of the best asset classes for tax purposes...real estate. Now, I'm not advising you to rush out and buy an investment property. But rather than just dumping your money into mutual funds...over which you have almost 0 control...buy some books on real estate investing. There are plenty of areas to get into, rehabs, single family housing rentals, multifamily, apartments, mobile home parks...and even some of those can have their own specialties. Learn now! And yes, you do have some control over real estate...you control where you buy, so you pick your local market...you can always force appreciation by rehabbing...if you rent, you approve your renters. Compared to a mutual fund run by someone you'll never meet, buying stocks in companies you've likely never even heard of...you have far more control. No matter what area of investing you decide to go into, there is a learning curve...or you will pay a penalty. Go slow, but move forward. Also, all the advice on using your employer's matching (if available) for 401k should be the easiest first step. How do you turn down free money? Besides, the bottom line on your paycheck may not change as much as you think it might...and when weighed against what you get in return...well worth the time to get it setup and active.", "title": "" }, { "docid": "316db4223ba9dcc3fba8f86d17dd2faa", "text": "Here's what I'd do: Pay off the cards and medical. Deposit 35k in the best interest bearing accounts you can find (maybe some sort of ladder). Link your student loans payments to this account. This frees up $486 a month in income, and generates a small amount of interest at the same time. Now, set up some sort of retirement account. Put $400 a month in it. This leaves you with $86 a month to use as you please. You still have $10 000 cash, out of which you could buy an inexpensive used car, and bank some as emergency funds.", "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": "23d0cbff2e9a46f0f939a6905e11e253", "text": "I would be realistic and recognize that however you invest this money, it is unlikely to be a life-changing sum. It is not going to provide an income which significantly affects your monthly budget, nor is it going to grow to some large amount which will allow you to live rent-free or similar. Therefore my advice is quite different to every other answer so far. If I was you, I would: I reckon this might get you through half the money. Take the other $25,000 and go travelling. Plan a trip to Europe, South America, Asia or Australia. Ask your job for 3 or 6 months off, and quit it they won't give it you. Find a few places which you would really like to visit, and schedule around them a lot of time to go where you want. Book your flights in advance, or book one way, and put aside enough money for the return when you know where you'll be coming back from. Stay in hostels, a tent or cheap AirBnB. Make sure you have a chance to meet other people, especially other people who are travelling around. Figure out in advance how much it will cost you a day to live basically, and budget for a few beers/restaurants/cinema/concert tickets/drugs/whatever you do to have fun. It's really easy nowadays to go all sorts of places, and be very spontaneous about what you want to do next. You will find that everywhere in the world is different, all people have something unusual about them, and everywhere is interesting. You will meet some great people and probably become both more independent and better at making friends with strangers. Your friends in other countries could stay friends for life. The first time you see Rome, the Great Barrier Reef, the Panama canal or the Tokyo fish market will be with you forever. You have plenty of years to fill up your 401K. You won't have the energy, fearlessness and openmindedness of a 23 year old forever. Go for it.", "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": "d530f2b6588cb43271a67fa236e2bc7c", "text": "You can put them in a 5 years CD and getting a maximum of %2.5 APY if you're lucky. If you put 15k now, in 5 years you'll have $1.971. If it sounds good then take a look at the current inflation rate (i'm in usa)... If you want to think about retirement then you should open a Roth IRA. But you won't be able to touch the money without penalties (10% of earnings) before you get 59 1/2 years old. Another option would be to open a regular investment account with an online discounted broker. Which one? Well, this should be a totally separate question... If you decide to invest (Roth IRA or regular account) and you're young and inexperienced then go for a balanced mutual fund. Still do a lot of research to determine your portfolio allocation or which fund is best suited for you. Betterment (i never used it) is a no brainer investment broker. Please don't leave them in a generic checking or low interest savings account because you'll save nothing (see inflation again)...", "title": "" }, { "docid": "ed5fb75f53cbfb9ec38c820ec74761d4", "text": "I'd suggest waiting until a bit after you are married. To Eagle1's point, even $23,000 is not a huge sum of money. You didn't make any mention of a desire to buy a home, but if that becomes part of the plan, I'd want every cent of liquidity I can get. I wrote Student Loans and Your First Mortgage to explain why your buying power for the house is lowered by paying that loan. In your case, $5000 is 20% of $25000. For a good 20% down purchase, I'd want those funds available. You also don't mention retirement accounts. Depending on the home purchase timing, I'd start to think about putting aside at least the $5500 per year IRA/Roth IRA maximum.", "title": "" }, { "docid": "cae10da6b845a9f5199d74784818981b", "text": "You probably have a UMTA/UGMA account. While the money in that account belongs to you, as long as you're a minor (which is until the age of 18, in California) - you cannot directly access it. Instead, your parent(s) or guardian(s) or any other trustee manages that account for you, with your best interests in mind. While you may want to spend that money or give it away to your boyfriend or whoever else, it is very likely not in your best interest to do that. That is why your dad refuses. He has a legal responsibility, which is called fiduciary duty, to ensure the money is spent in a way that is best for you. If the fiduciary just lets you spend the money away - you could later, when you're no longer a minor, sue that person for the breach of trust. When you're older and a bit more mature you'll be able to make your own decisions and do whatever you want with that money. But as long as your parents have the responsibility to act in your best interests, it is likely that your boyfriend will stay in Pennsylvania for a while.", "title": "" }, { "docid": "85a5d77aeba67dafed30a54c183028fe", "text": "Why not just hold that cash until you graduate from college? Why? Because it's a safety net - make sure you don't have any sudden expenses (medical, school bills, car bills, etc). Then after school you're going to need some cash for job moving, relocation, clothes, downpayment on apartment, utilities, etc. If all that cash is tied up into a 401 or IRA then you can't touch it and if something happens you'll be tempted to take a loan out. Ack! You'll have plenty of time since you're just starting to save for retirement. Keep this cash as a beginning emergency fund and hang on cause as soon as you get out of school things really move fast. :)", "title": "" }, { "docid": "ba4c40ef92b1b89622a3207dc14fd562", "text": "My god man, where do you live that is too expensive to live on your own and 7K isn't enough for emergency cash? Anyway, with your age and income I would be more worried about a long-term sustainable lifestyle. In other words, a job that nets you more than $26K/year. Someday you may want to have a wife and kids and that income sure as hell wont pay for their college. That was life advice, now for financial: I've always been a believer that if someone is not a savvy investor, their priorities before investments should be paying off debt. If you had a lot of capital or knew your way around investment vehicles and applicable returns then I would be telling you something different. But in your case, pay off that car first giving yourself more money to invest in the long-run.", "title": "" }, { "docid": "9b3bd63f5d55ca2eb550414c3182b710", "text": "Setting aside for the moment the very relevant issue of whether you need the full amount quickly, I'll just tackle comparing which option gives you to maximum amount of money (in terms of real dollars). The trick is, unless you think inflation will suddenly reverse itself or stop entirely (not likely), $50K today is worth a LOT more than $50K in 20 years. If you don't believe me, consider that just 30 years ago the average price for a mid-level new car was around $3k. When you grandfather says he got a burger for a nickel, he isn't talking about 2010 dollars. So, how do you account for this? Well, the way financial people and project managers do it to estimate how much to pay today for $1 at some point in the future is through a net present value (NPV) calculation. You can find a calculator here. In your question, you gave some numbers for the payout, but not the lump sum prize amount. Going solely on what you have provided, I calculate that you should take the lump sum if it is greater than $766,189.96 which is the net present value of 20 years of $50K Payments assuming 3% annual inflation, which is fairly a fairly reasonable number given history. However, if you think the out-of-control Gov't spending is going to send inflation through the roof (possible, but not a given), then you almost certainly would want the lump sum. I suppose in that scenario you might want the lump sum anyway because if the Govt starts filching on their obligations, doing it to a small number of lottery winners might be politically more popular than cutting other programs that affect a large number of voters.", "title": "" }, { "docid": "bd3db7ba67b69b0a6bb9b5ed64bdbf5b", "text": "I am sorry for your loss, this person blessed you greatly. For now I would put it in a savings account. I'd use a high yield account like EverBank or Personal Savings from Amex. There are others it is pretty easy to do your own research. Expect to earn around 2200 if you keep it there a year. As you grieve, I'd ask myself what this person would want me to do with the money. I'd arrive at a plan that involved me investing some, giving some, and spending some. I have a feeling, knowing that you have done pretty well for yourself financially, that this person would want you to spend some money on yourself. It is important to honor their memory. Giving is an important part of building wealth, and so is investing. Perhaps you can give/purchase a bench or part of a walkway at one of your favorite locations like a zoo. This will help you remember this person fondly. For the investing part, I would recommend contacting a company like Fidelity or Vanguard. The can guide you into mutual funds that suit your needs and will help you understand the workings of them. As far as Fidelity, they will tend to guide you toward their company funds, but they are no load. Once you learn how to use the website, it is pretty easy to pick your own funds. And always, you can come back here with more questions.", "title": "" }, { "docid": "d636f7f7ecf7b891f7c3dac59f4a737c", "text": "Congratulations! You're making enough money to invest. There are two easy places to start: I recommend against savings accounts because they will quite safely lose your money: the inflation rate is usually higher than the interest rate on a savings account. You may have twice as much money after 50 years, but if everything costs four times as much, then you've lost buying power. If, in the course of learning about investing, you'd like to try buying individual stocks, do it only with money you wouldn't mind losing. Index funds will go down slightly if one of the companies in that index fails entirely, but the stock of a failed company is worthless.", "title": "" }, { "docid": "cc68b250e142e0a89cd68aa80106d854", "text": "If it turns out that you do want to help pay the tax bill (after answering all the questions above), I say cash out those funds. You are apparently very young with a long work life ahead (lucky you). Step aside from the actual money part of it for a moment. What does your Mom want? What do you really want to do about this? Is it from love that you want to help but are afraid it's a bad financial decision? Or is it from a feeling of duty and you deep down don't really want to spend your savings on Mom's tax bill. - If you really do want to help and you have the wherewithall to do so, then do it. Otherwise don't. You can recover financially. - I myself have had my retirement savings go to nearly zero 3 times. The first time I recovered pretty easily. The second time, not so easily. I'm just starting on the recovery path for the 3rd time at age 58 and I highly doubt I ever will recover this time. I didn't cash out on purpose but the stock market was not friendly. - My main point is to figure out truly what you want.", "title": "" }, { "docid": "6b474a0d47dd8050a1213e49e01afbc4", "text": "Thanks for your service. I would avoid personal investment opportunities at this point. Reason being that you can't personally oversee them if you are deployed overseas. This would rule out rentals and small businesses. Revisit those possibilities if you get married or leave the service. If you have a definite time when you would like to purchase a car, you could buy a six or twelve month CD with the funds that you need for that. That will slightly bump up your returns without taking much risk. If you don't really need to buy the car, you could invest that money in stocks. Then if the stock market tanks, you wait until it recovers (note that that can be five to ten years) or until you build up your savings again. That increases your reward at a significant increase in your risk. The risk being that you might not be able to buy a car for several more years. Build an emergency fund. I would recommend six months of income. Reason being that your current circumstances are likely to change in an emergency. If you leave the service, your expenses increase a lot. If nothing else, the army stops providing room for you. That takes your expenses from trivial to a third of your income. So basing your emergency fund on expenses is likely to leave you short of what you need if your emergency leaves you out of the service. Army pay seems like a lot because room (and board when deployed) are provided. Without that, it's actually not that much. It's your low expenses that make you feel flush, not your income. If you made the same pay in civilian life, you'd likely feel rather poor. $30,000 sounds like a lot of money, but it really isn't. The median household income is a little over $50,000, so the median emergency fund should be something like $25,000 on the income standard. On the expenses standard, the emergency fund should be at least $15,000. The $15,000 remainder would buy a cheap new car or a good used car. The $5000 remainder from the income standard would give you a decent used car. I wouldn't recommend taking out a loan because you don't want to get stuck paying a loan on a car you can't drive because you deployed. Note that if you are out of contact, in the hospital, or captured, you may not be able to respond if there is a problem with the car or the loan. If you pay cash, you can leave the car with family and let them take care of things in case of a deployment. If you invested in a Roth IRA in January of 2016, you could have invested in either 2015 or 2016. If 2015, you can invest again for 2016. If not, you can invest for 2017 in three months. You may already know all that, but it seemed worth making explicit. The Thrift Savings Plan (TSP) allows you to invest up to $18,000 a year. If you're investing less than that, you could simply boost it to the limit. You apparently have an extra $10,000 that you could contribute. A 60% or 70% contribution is quite possible while in the army. If you max out your retirement savings now, it will give you more options when you leave the service. Or even if you just move out of base housing. If your TSP is maxed out, I would suggest automatically investing a portion of your income in a regular taxable mutual fund account. Most other investment opportunities require help to make work automatically. You essentially have to turn the money over to some individual you trust. Securities can be automated so that your investment grows automatically even when you are out of touch.", "title": "" }, { "docid": "0a4ba4f4b5384baaa01d6d1d5113b329", "text": "You're extremely fortunate to have $50k in CDs, no debt, and $3800 disposable after food and rent. Congrats. Here's how I would approach it. If you see yourself getting into a home in the next couple of years, stay safe and liquid. CDs (depending on the duration) fit that description. Because you have disposable income and you're young, you should be contributing to a Roth IRA. This will build in value and compound over your lifetime, so that when you're in your 70s you'll actually have a retirement. Financial planners love life insurance because that's how they make all their money. I have whole life insurance because its cash value will be part of my retirement. It may also cover my wife if I ever decide to get married. It may or may not make sense for you now depending on how soon you want to buy a home and home expensive they are in your zip code. Higher risk, higher reward- you can count on that. Keep the funds in the United States and don't try to get into any slick financial moves. If you have a school in town, see if you can take an Intro to Financial Planning class. It's extremely helpful for anyone with these kinds of questions.", "title": "" }, { "docid": "f28372124749da6c9627223ed8e9e488", "text": "You need to find a fiduciary advisor pronto. Yes, you are getting a large amount of money, but you'll probably have to deal with higher than average health expenses and lower earning potential for years to come. You need to make sure the $1.2 million lasts you, and for that you need professional advice, not something you read on the Internet. Finding a knowledgeable advisor who has your interests at heart at a reasonable rate is the key here. These articles are a good start on what to look for: http://www.investopedia.com/articles/financialcareers/08/fiduciary-planner.asp https://www.forbes.com/sites/janetnovack/2013/09/20/6-pointed-questions-to-ask-before-hiring-a-financial-advisor/#2e2b91c489fe http://www.investopedia.com/articles/professionaleducation/11/suitability-fiduciary-standards.asp You should also consider what your earning potential is. You rule out college but at 26, you can have a long productive career and earn way more money than the $1.2 million you are going to get.", "title": "" }, { "docid": "965faa14f779d2158cfbb2260982ea77", "text": "\"At 50 years old, and a dozen years or so from retirement, I am close to 100% in equities in my retirement accounts. Most financial planners would say this is way too risky, which sort of addresses your question. I seek high return rather than protection of principal. If I was you at 22, I would mainly look at high returns rather than protection of principal. The short answer is, that even if your investments drop by half, you have plenty of time to recover. But onto the long answer. You sort of have to imagine yourself close to retirement age, and what that would look like. If you are contributing at 22, I would say that it is likely that you end up with 3 million (in today's dollars). Will you have low or high monthly expenses? Will you have other sources of income such as rental properties? Let's say you rental income that comes close to covering your monthly expenses, but is short about 12K per year. You have a couple of options: So in the end let's say you are ready to retire with about 60K in cash above your emergency fund. You have the ability to live off that cash for 5 years. You can replenish that fund from equity investments at opportune times. Its also likely you equity investments will grow a lot more than your expenses and any emergencies. There really is no need to have a significant amount out of equities. In the case cited, real estate serves as your cash investment. Now one can fret and say \"\"how will I know I have all of that when I am ready to retire\"\"? The answer is simple: structure your life now so it looks that way in the future. You are off to a good start. Right now your job is to build your investments in your 401K (which you are doing) and get good at budgeting. The rest will follow. After that your next step is to buy your first home. Good work on looking to plan for your future.\"", "title": "" }, { "docid": "f90edbfca0952db93bd3675d5978d7c4", "text": "Why should the rich who buy more expensive homes be subisdized by those who pay less, or from those who rent? A person who buys a 500k home in a high property tax area wins twice. Once but having more tax breaks by being able to deduct more than your average working class person who buys a house at 250k and the second time when they get nicer schools, public services etc at other people's dime. SF home prices are a combination or speculation investment and poor government control. SF prices are at Tokyo levels when the population density is at 1/10. That is a failure of local government policy to build more homes, not from lack of tax breaks. If your community wants to pay higher taxes for more local services, power to you and I encourage it, but you shouldn't be subsidized by those who dont. Imo, people shouldn't be punished for not owning property or living in a state where they think sales tax is better than income or property.", "title": "" } ]	fiqa
5de46f76eb3eade2b18984d38af91fcc	Capital losses on early-purchased stock?	[ { "docid": "6e6e40c1fea4268cb12f780d66f98e66", "text": "Yes When exercising a stock option you will be buying the stock at the strike price so you will be putting up your money, if you lose that money you can declare it as a loss like any other transaction. So if the stock is worth $1 and you have 10 options with a strike at $0.50 you will spend $500 when you exercise your options. If you hold those shares and the company is then worth $0 you lost $500. I have not verified my answer so this is solely from my understanding of accounting and finance. Please verify with your accountant to be sure.", "title": "" } ]	[ { "docid": "20f01969fc7c5ecc435420d3f8a15930", "text": "This is not right. Inferring the employee stock pool’s takeaway is not as easy as just taking a fraction of the purchase price. As an example, that wouldn’t account for any preferred returns of other ownership classes, among other things. All considered though, it’s reasonable to assume that the employee stock pool will get some premium. Best of luck.", "title": "" }, { "docid": "9c23a0157305f44f8188c6b44ff7c5ac", "text": "If the company reported a loss at the previous quarter when the stock what at say $20/share, and now just before the company's next quarterly report, the stock trades around $10/share. There is a misunderstanding here, the company doesn't sell stock, they sell products (or services). Stock/share traded at equity market. Here is the illustration/chronology to give you better insight: Now addressing the question What if the stock's price change? Let say, Its drop from $10 to $1 Is it affect XYZ revenue ? No why? because XYZ selling ads not their stocks the formula for revenue revenue = products (in this case: ads) * quantity the equation doesn't involve capital (stock's purchasing)", "title": "" }, { "docid": "d52ea9db44206476ac686502ec2c2d92", "text": "\"You have a sequence of questions here, so a sequence of answers: If you stopped at the point where you had multiple wins with a net profit of $72, then you would pay regular income tax on that $72. It's a short term capital gain, which does not get special tax treatment, and the fact that you made it on multiple transactions does not matter. When you enter your next transaction that takes the hypothetical loss the question gets more complicated. In either case, you are paying a percentage on net gains. If you took a two year view in the second case and you don't have anything to offset your loss in the second year, then I guess you could say that you paid more tax than you won in the total sequence of trades over the two years. Although you picked a sequence of trades where it does not appear to play, if you're going to pursue this type of strategy then you are likely at some point to run into a case where the \"\"wash sale\"\" rules apply, so you should be aware of that. You can find information on this elsewhere on this site and also, for example, here: http://www.marketwatch.com/story/understanding-the-wash-sale-rules-2015-03-02 Basically these rules require you to defer recording a loss under some circumstances where you have rapid wins and losses on \"\"substantially identical\"\" securities. EDIT A slight correction, you can take part of your losses in the second year even if you have no off-setting gain. From the IRS: If your capital losses exceed your capital gains, the amount of the excess loss that you can claim on line 13 of Form 1040 to lower your income is the lesser of $3,000, ($1,500 if you are married filing separately)\"", "title": "" }, { "docid": "1cc4b08bb104d39397a5e68f8d951d9f", "text": "Is it just -344.58= -$155.72 for CCC and -110.41= -$4.51 for DDD? Yes it needs to be recorded as negative because at some point in time, the investor will have to spend money to buy these shares [cover the short sell and return the borrowed shares]. Whether the investor made profit or loss will not be reflected as you are only reflecting the current share inventory.", "title": "" }, { "docid": "69a4efad355a9b1337be7e402623dcba", "text": "As I recall, the gain for ISOs is considered ordinary income, and capital losses can only negate up to $3000 of this each year. If you exercised and held the stock, you have ordinary income to the exercise price, and cap gain above that, if you hold the stock for two years. EDIT - as noted below, this answer works for USians who found this question, but not for the OP who is Canadian, or at least asked a question at it relates to Canada's tax code.", "title": "" }, { "docid": "e8028417ab8882585d653989bfad1b06", "text": "When you sell a stock that you own, you realize gains, or losses. Short-term gains, realized within a year of buying and selling an asset, are taxed at your maximum (or marginal) tax rate. Long term-gains, realized after a year, are taxed at a lower, preferential rate. The first thing to consider is losses. Losses can be cancelled against gains, reducing your tax liability. Losses can also be carried over to the next tax year and be redeemed against those gains. When you own a bunch of the same type of stock, bought at different times and prices, you can choose which shares to sell. This allows you to decide whether you realize short- or long-term gains (or losses). This is known as lot matching (or order matching). You want to sell the shares that lost value before selling the ones that gained value. Booking losses reduces your taxes; booking gains increases them. If faced with a choice between booking short term and long term losses, I'd go with the former. Since net short-term gains are taxed at a higher rate, I'd want to minimize the short-term tax liability before moving on to long-term tax liability. If my remaining shares had gains, I'd sell the ones purchased earliest since long-term gains are taxed at a lower rate, and delaying the booking of gains converts short-term gains into long-term ones. If there's a formula for this, I'd say it's (profit - loss) x (tax bracket) = tax paid", "title": "" }, { "docid": "afafec3ae79fa797fcb2e00de3988080", "text": "For reporting purposes, I would treat the purchase and sale of gold like a purchase and sale of a stock. The place to do so is Schedule D. (And if it's the wrong form, but you reported it, there is might not be a penalty, whereas there is a penalty for NOT reporting.) The long term gain would be at capital gains rates. The short term gain would be at ordinary income rates. And if you have two coins bought at two different times, you get to choose which one to report (as long as you report the OTHER one when you sell the second coin).", "title": "" }, { "docid": "8b85c5d4437839baccbbc65186d8eb96", "text": "If you do this, you own a stock worth $1, with a basis of $2. The loss doesn't get realized until the shares are sold. Of course, we hope you see the stock increase above that price, else, why do this?", "title": "" }, { "docid": "92ee635075c50e8b34f99db6770ebb1a", "text": "You bought the stock at some point in the past. You must have had a reason for this purchase. Has the recent change in price changed the reason you bought the stock? You must assume your losses are sunk costs. No matter what action you take, you can not recover your losses. Do not attempt to hold the stock in the hopes of regaining value, or sell it to stop losses. Instead approach this event as if this very day, you were given shares of the company's stock at their current market value for free as a gift. In this hypothetical situation, would you hold the shares, or sell them? Use that to judge your options. Not everyone, myself included, can handle the mental stress of watching share prices change. You can always consider trading index funds instead, which are much less volatile but will provide consistent, albeit, boring returns. This may or may not be you, but it's an option. Finally, do not keep money in the market you are not prepared to lose. It seems obvious, but if you lost 40% today, you could lose 100% tomorrow.", "title": "" }, { "docid": "b58965eac1ac22be6c97704ca003a1f0", "text": "My understanding is that losses are first deductible against any capital gains you may have, then against your regular income (up to $3,000 per year). If you still have a loss after that, the loss may be carried over to offset capital gains or income in subsequent years As you suspect, a short term capital loss is deductible against short term capital gains and long term losses are deductible against long term gains. So taking the loss now MIGHT be beneficial from a tax perspective. I say MIGHT because there are a couple scenarios in which it either may not matter, or actually be detrimental: If you don't have any short term capital gains this year, but you have long term capital gains, you would have to use the short term loss to offset the long term gain before you could apply it to ordinary income. So in that situation you lose out on the difference between the long term tax rate (15%) and your ordinary income rate (potentially higher). If you keep the stock, and sell it for a long term loss next year, but you only have short-term capital gains or no capital gains next year, then you may use the long term loss to offset your short-term gains (first) or your ordinary income. Clear as mud? The whole mess is outlined in IRS Publication 550 Finally, if you still think the stock is good, but just want to take the tax loss, you can sell the stock now (to realize the loss) then re-buy it in 30 days. This is called Tax Loss Harvesting. The 30 day delay is an IRS requirement for being allowed to realize the loss.", "title": "" }, { "docid": "a77d1bcfc023522e1e1e57a7df3620f2", "text": "You are correct. She cannot claim the initial loss of $1,000 on her taxes, she can only report the $500 profit. However, the IRS does allow her to add the $1,000 loss to the basis cost of her replacement shares. e.g.", "title": "" }, { "docid": "a4145f2a8b7e3f573a413505cf772d3d", "text": "Yes, an overall $500 loss on the stock can be claimed. Since the day trader sold both lots she acquired, the Wash Sale rule has no net impact on her taxes. The Wash Sale rule would come into play if within thirty days of second sale, she purchased the stock a third time. Then she would have to amend her taxes because claiming the $500 loss would no longer be a valid under the Wash Sale rule. It would have to be added to the cost basis of the most recent purchase.", "title": "" }, { "docid": "bf0540111a2051185227f72005547c32", "text": "\"Generally if you are using FIFO (first in, first out) accounting, you will need to match the transactions based on the number of shares. In your example, at the beginning of day 6, you had two lots of shares, 100 @ 50 and 10 @ 52. On that day you sold 50 shares, and using FIFO, you sold 50 shares of the first lot. This leaves you with 50 @ 50 and 10 @ 52, and a taxable capital gain on the 50 shares you sold. Note that commissions incurred buying the shares increase your basis, and commissions incurred selling the shares decrease your proceeds. So if you spent $10 per trade, your basis on the 100 @ 50 lot was $5010, and the proceeds on your 50 @ 60 sale were $2990. In this example you sold half of the lot, so your basis for the sale was half of $5010 or $2505, so your capital gain is $2990 - 2505 = $485. The sales you describe are also \"\"wash sales\"\", in that you sold stock and bought back an equivalent stock within 30 days. Generally this is only relevant if one of the sales was at a loss but you will need to account for this in your code. You can look up the definition of wash sale, it starts to get complex. If you are writing code to handle this in any generic situation you will also have to handle stock splits, spin-offs, mergers, etc. which change the number of shares you own and their cost basis. I have implemented this myself and I have written about 25-30 custom routines, one for each kind of transaction that I've encountered. The structure of these deals is limited only by the imagination of investment bankers so I think it is impossible to write a single generic algorithm that handles them all, instead I have a framework that I update each quarter as new transactions occur.\"", "title": "" }, { "docid": "a9f1667c1c5842672022e480c86b017a", "text": "Note that the rules around wash sales vary depending on where you live. For the U.S., the wash sale rules say that you cannot buy a substantially identical stock or security within 30 days (before or after) your sale. So, you could sell your stock today to lock in the capital losses. However, you would then have to wait at least 30 days before purchasing it back. If you bought it back within 30 days, you would disqualify the capital loss event. The risk, of course, is that the stock's price goes up substantially while you are waiting for the wash sale period. It's up to you to determine if the risk outweighs the benefit of locking in your capital losses. Note that this applies regardless of whether you sell SOME or ALL of the stock. Or indeed, if we are talking about securities other than stocks.", "title": "" }, { "docid": "06238bcde4f209948bd74386f6b222c0", "text": "\"I've bought ISO stock over they years -- in NYSE traded companies. Every time I've done so, they've done what's called \"\"sell-to-cover\"\". And the gubmint treats the difference between FMV and purchase price as if it's part of your salary. And for me, they've sold some stock extra to pay estimated taxes. So, if I got this right... 20,000 shares at $3 costs you 60,000 to buy them. In my sell-to-cover at 5 scenario: did I get that right? Keeping only 4,000 shares out of 20,000 doesn't feel right. Maybe because I've always sold at a much ratio between strike price and FMV. Note I made some assumptions: first is that the company will sell some of the stock to pay the taxes for you. Second is your marginal tax rate. Before you do anything check these. Is there some reason to exercise immediately? I'd wait, personally.\"", "title": "" } ]	fiqa
85c822184651c846c38c01f6dca9a3d5	Now that Microsoft Money is gone, what can I do? [duplicate]	[ { "docid": "90b0557ba3649538e4ef1b972e18f484", "text": "Mint.com is a fantastic free personal finance software that can assist you with managing your money, planning budgets and setting financial goals. I've found the features to be more than adequate with keeping me informed of my financial situation. The advantage with Mint over Microsoft Money is that all of your debit/credit transactions are automatically imported and categorized (imperfectly but good enough). Mint is capable of handling bank accounts, credit card accounts, loans, and assets (such as cars, houses, etc). The downsides are:", "title": "" } ]	[ { "docid": "f0caf721b73d61349849ec09fa64db2f", "text": "Uh, Quicken is virtually identical to MS Money. If you liked money and don't want to change, use that.", "title": "" }, { "docid": "4767150d12ae946f266ade3beae6a7b0", "text": "You could keep an eye on BankSimple perhaps? I think it looks interesting at least... too bad I don't live in the US... They are planning to create an API where you can do everything you can do normally. So when that is released you could probably create your own command-line interface :)", "title": "" }, { "docid": "d8bd50cfab7a7dfa28146c0fa17dbe77", "text": "Based on my experience with OpenQuant, which is a development platform for automated trading strategies (and therefore can be easily be used for backtesting your personal strategy), I can give a little insight into what you might look for in such a platform. OpenQuant is a coding environment, which reads data feeds from a variety of sources (more on that in the second point), and runs the code for your strategy on that data and gives you the results. The data could be imported from a live data feed or from historical data, either through numerous API's, CSV/Excel, etc. You can write your own strategies using the custom C# libraries included with the software, which spares you from implementing your own code for technical indicators, basic statistical functions, etc. Getting the data is another issue. You could use joe's strategy and calculate option prices yourself, although you need to exercise caution when doing this to test a strategy. However, there is no substitute for backtesting a strategy on real data. Markets change over time, and depending on how far back you're interested in testing your strategy, you may run into problems. The reason there is no substitute for using real data is that attempting to replicate the data may fail in some circumstances, and you need a method of verifying that the data you're generating is correct and realistic. Calculating a few values, comparing them to the real values, and calibrating accordingly is a good idea, but you have to decide for yourself how many checks you want to do. More is better, but it may not be enough to realistically test your strategy. Disclaimer: Lest you interpret my post as a shameless plug for the OpenQuant platform, I'll state that I found the interface awful (it looked vaguely like Office 2000 but ten years too late) and the documentation woefully incomplete. I last used the software in 2010, so it may have improved in the intervening years, but your mileage may vary. I only use it as an example to give some insight into what you might look for in a backtesting platform. When you actually begin trading, a different platform is likely in order. That being said, it responded fairly quickly and the learning curve wasn't too steep. The platform wasn't too expensive at the time (about $700 for a license with no data feeds, I think) but I was happy that the cost wasn't coming out of my pocket. It's only gotten more expensive and I'm not sure it's worth it.", "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": "3a19279ffae2f4db056a53ee0f972eae", "text": "\"You could buy options. I do not know what your time horizon is but it makes all the difference due to theta burn. There are weekly, monthly, quarterly, yearly and even longer duration options called leaps. You have decided how long of a time frame. You also have to see what the implied volatility is for the underlying because if you think hypothetically that the price of the spy is 100 dollars currently. Today is hypothetically a Thursday and you buy a weekly option expiring on Friday ( the next day) of strike 100.5 and the call option is priced at .55 cents and you buy it. This means that the underlying has to move .5 dollars in one day to be considered in the money but at time 0, the option should only be worth its intrinsic value which is the underlying, (Say the SPY moved 55 cents up from 100 to 100.55), (100.55) minus the strike (100.5) = 5 cents, so if you payed 55 cents and one day later at expiration its worth 5 cents ,you lost almost 91% of your money, rather with buying and holding you lose a lot less. The leverage is on a 10x scale typically. That is why timing is so important. Anyone can say x stock is going to go up in the future, but if you know **when** you can make a killing if it is not already priced into the market. Another thing you can do is figure out how much MSFT contributes to the SPX movement in terms of points. What does a 1% move in MSFT doto SPX. If you can calculate that and you think you know where MSFT is going, you can just trade the spy options synthetically as if it were microsoft. You could also buy msft stock on margin as a retail investor, but be careful. Like Rhaskett said, look into an etf that has microsoft. The nasdaq has a nasdaq-100 which microsoft is in called the triple Q. The ticker is qqq. PowerShares QQQ™, formerly known as \"\"QQQ\"\" or the \"\"NASDAQ- 100 Index Tracking Stock®\"\", is an exchange-traded fund based on the Nasdaq-100 Index®. Best of luck and always understand what you are buying before you buy it, JL\"", "title": "" }, { "docid": "f30604cdaf6d233b808313a4423f3974", "text": "I currently use Moneydance on my Mac. Before that I had used Quicken on a PC until version 2007. It is pretty good, does most simple investment stuff just fine. It can automatically download prices for regular stocks. Mutual funds I have to input by hand.", "title": "" }, { "docid": "9ebc43ac297c2c5d3bad28059236f170", "text": "Check the Financial section in this list of Open Source Software", "title": "" }, { "docid": "37bce082765fcc99df82f798839525d1", "text": "I second the vote for GnuCash. It runs on Linux, Windows, and Mac. It is double-entry accounting, so there is a little bit of a learning curve, but it sounds like you should probably have something a little more powerful than Mint for your situation.", "title": "" }, { "docid": "fd1d479b3ef0591db81ed22afc57b378", "text": "\"I'm not personally familiar with this, but I had a look at the Companies House guidance. Unfortunately, it seems you've done things in the wrong order. You should have first got the funds out, distributed them to yourself as a dividend or salary, and then closed the account, and then wound up the company. Legally speaking, the remaining funds now belong to the government (\"\"bona vacantia\"\"). It's possible you could apply to have the company restored, but I think that might be difficult; I don't think the administrative restoration procedure applies in your situation. Given the amount involved, I'd suggest just forgetting about it.\"", "title": "" }, { "docid": "5551e1d6c53d78ac4f021ce3d5c4c4b4", "text": "I traded futures for a brief period in school using the BrokersXpress platform (now part of OptionsXpress, which is in turn now part of Charles Schwab). They had a virtual trading platform, and apparently still do, and it was excellent. Since my main account was enabled for futures, this carried over to the virtual account, so I could trade a whole range of futures, options, stocks, etc. I spoke with OptionsXpress, and you don't need to fund your acount to use the virtual trading platform. However, they will cancel your account after an arbitrary period of time if you don't log in every few days. According to their customer service, there is no inactivity fee on your main account if you don't fund it and make no trades. I also used Stock-Trak for a class and despite finding the occasional bug or website performance issue, it provided a good experience. I received a discount because I used it through an educational institution, and customer service was quite good (probably for the same reason), but I don't know if those same benefits would apply to an individual signing up for it. I signed up for top10traders about seven years ago when I was in secondary school, and it's completely free. Unfortunately, you get what you pay for, and the interface was poorly designed and slow. Furthermore, at that time, there were no restrictions that limited the number of shares you could buy to the number of outstanding shares, so you could buy as many as you could afford, even if you exceeded the number that physically existed. While this isn't an issue for large companies, it meant you could earn a killing trading highly illiquid pink sheet stocks because you could purchase billions of shares of companies with only a few thousand shares actually outstanding. I don't know if these issues have been corrected or not, but at the time, I and several other users took advantage of these oversights to rack up hundreds of trillions of dollars in a matter of days, so if you want a realistic simulation, this isn't it. Investopedia also has a stock simulator that I've heard positive things about, although I haven't used it personally.", "title": "" }, { "docid": "3c3eea13c7049f014f8e43e188fed63e", "text": "Current Money users may want to take a look at this: http://sites.google.com/site/pocketsense/home/msmoneyfixp1 Pretty easy (and secure) way to continue getting online data into Money.", "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": "32c8ff3e40906d3d4e67dae81f44f06b", "text": "Billshrink offers some pretty neat analysis tools to help you pick a credit card. They focus more on rewards than the features you mention but it might be worth a look. If you use Mint, they offer a similar service, too. If you're not already using Mint, though, I'd look at Billshrink as Mint requires some extensive setup. MOD EDIT Looks like billshrink.com is shut down. From their site: Dear BillShrink customer, As you may have heard, BillShrink.com was shut down on July 31, 2013. While we’re sad to say goodbye, we hope we’ve been able to help you be better informed and save some money along the way! The good news is that much of the innovative award-winning BillShrink technology will still be available via our StatementRewards platform (made available to customers by our partnering financial institutions). Moreover, we expect to re-launch a new money-saving service in the future. To see more of what we’re up to, visit Truaxis.com. We have deleted your personal information as of July 31. We will retain your email address only to announce a preview of the new tool. If you do not want us to retain your email address, you can opt out in the form below. This opt out feature will be available until September 31, 2013. If you have already opted out previously, you do not need to opt out again. If you have any further questions, contact us at [email protected]. Thanks, The BillShrink/Truaxis Team", "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": "a471c4c58c07ed7ca866cff9414c8695", "text": "There isn't one. I haven't been very happy with anything I've tried, commercial or open source. I've used Quicken for a while and been fairly happy with the user experience, but I hate the idea of their sunset policy (forced upgrades) and using proprietary format for the data files. Note that I wouldn't mind using proprietary and/or commercial software if it used a format that allowed me to easily migrate to another application. And no, QIF/OFX/CSV doesn't count. What I've found works well for me is to use Mint.com for pulling transactions from my accounts and categorizing them. I then export the transaction history as a CSV file and convert it to QIF/OFX using csv2ofx, and then import the resulting file into GNUCash. The hardest part is using categories (Mint.com) and accounts (GnuCash) properly. Not perfect by any means, but certainly better than manually exporting transactions from each account.", "title": "" } ]	fiqa
72359d766590223e013044113b2c4102	Do you avoid tax when taking a home equity loan?	[ { "docid": "ee0f29ce70781de82cc27060603a7487", "text": "You'll be taxed when you sell the house, but not before that (or if you do some other transaction that realizes the gain, talk to your real estate attorney or accountant for more details). A Home Equity line-of-credit is simply a secured loan: it's a loan, conditioned on if you fail to pay it back, they have a lien on your house (and may be able to force you to sell it to pay the loan back).", "title": "" }, { "docid": "c631614d19b6880eef1e66e950b7b172", "text": "Loans are not taxable events. The equity you took out is not income. It's a loan, and you pay it back with interest. You pay taxes on the capital gain of the home when you sell it. The tax does not take into account any mortgages, HELOCs, or other loans secured by the house. Instead the tax is calculated based on the price you sold it for, minus the price you bought it for, which is known as the capital gain. You can exclude $250k of that gain for a single person, $500k for a married couple. (There are a few other wrikles as well.) That would be true regardless of the loan balance at the time.", "title": "" }, { "docid": "1a6a1cc1d2e2c0f93c0610323b1fe185", "text": "\"(credits to Joe's answer above which alluded to what I was not considering) You aren't \"\"bypassing\"\" the tax liability if you invest in a home instead of, say, stocks. It's true stocks would be subject to tax during the year you cash in on them while the proceeds of a home equity loan would not affect your tax liability. HOWEVER, by taking on a new loan, you are liable for repayments. Those repayments would be made using your income from other sources, which IS taxable. So you can't avoid tax liability when financing your child's college education by using an equity line.\"", "title": "" }, { "docid": "834f3ffa277da1607e73f1c2399a09af", "text": "Why would someone invest in other instruments (e.g. stocks) to pay for childrens' college education when the capital gains on those are taxed, unlike a home equity loan? Many tax advantageous vehicles exist for the purpose of saving for college education such as 529 plans, Roth IRAs, Series EE and I bonds. Tax and penalty free distributions from a portfolio of stocks is possible if the distributions are for qualified education expenses and the account is in the form of a Roth IRA. A house is collateral for a home equity line of credit. A combination of unfortunate events could cause someone to default on the loan and loose their residence. Also, the tax advantages of 529 plans, and Roth IRAs are not applicable to purchase a motor boat. With respect, some people like to leave the home equity loan untapped for other uses. More Details: 529 plans are not taxed by on the Federal level when the withdraws are used for college. In many states, contributions to state sponsored 529 plans are deductible on the state level. These are not self directed so you can't trade stocks/bonds in a 529 plan, however, certain plans allow you to lock in the rate you pay for credit at today's prices. If you want a self directed (ability to trade stocks/bonds) vehicle with tax free disbursements for qualified education, consider a Roth IRA. There are yearly contribution limits, and penalty if the proceeds are not used for qualified educational expenses. Also I believe interest revenue from Series EE and I bonds is tax free if the bond is used for education. There are special conditions and situations to 529 plans, Roth IRAs, Series EE and I bonds, the purpose of this answer was to expand upon the tax advantageous vehicles for higher education.", "title": "" } ]	[ { "docid": "1b410374cf170e730ad6a327bc8d22c8", "text": "\"I often say \"\"don't let the tax tail wag the investing dog.\"\" I need to change that phrase a bit to \"\"don't let the tax tail wag the mortgage dog.\"\" Getting a tax deduction on a 4% mortgage basically results (assuming you already itemize) in an effective 3% rate mortgage. The best way to avoid tax is save pretax in a 401(k), IRA, or both. You are 57, and been through a tough time. You're helping your daughter through college, which is an expense, and admirable kindness to her. But all this means you won't start saving $10K/yr until age 59. The last thing I'd do is buy a bigger home and take on a mortgage. Unless you told me the house you want has an in-law apartment that will bring in a high rent, or can be used to rent rooms and be a money maker, I'd not do this. No matter how small the mortgage, your property tax bill will go up, and there would be a mortgage to pay. Even a tiny mortgage payment, $400, is nearly half that $10K potential annual savings plan. Your income is now excellent. Can your wife do anything to get hers to a higher level? In your situation, I'd save every cent I can.\"", "title": "" }, { "docid": "559bcb23af398eac7d3065409eed3ab5", "text": "If your mortgage interest is tax-deductible, it's generally a bad idea to pay down the principal on the mortgage because you'd be losing the tax deduction. You could instead invest it in a tax-free municipal bond fund, especially if you're in a high tax bracket (including state and local marginal tax rates). For example, if you have a 5% rate mortgage on your home, you could invest in a 3.5% municipal bond and still come out ahead when you apply the tax deduction to your income at a 44% (33% federal + 7% state + 4% city in NYC) marginal tax rate.", "title": "" }, { "docid": "93e946a25669e18a1f2fb8f420eed114", "text": "In the United States Short-term capital gains are taxed at rates similar to regular income which is 25% if you make less than $91,000 and 28% if you make more than that but less than $190,000. If you make more than $190,000 then the rate is 33%. If you hold the stock for a year or more than the tax rate is 15%, unless your income is less than $33,000 in which case there is no tax on long-term gains. As a general rule, the way to make money is to stay out of debt, so I cannot advise you to assume a mortgage. Financially you are better off investing your money. Much like you I bought a house with a mortgage using about $30,000 in a down payment about 20 years ago and I paid it off a few years ago. If I had to do it over again, I would have bought a shack (a steel building) for $30,000 and lived in that and invested my income. If I had done that, I would be about $500,000 richer today than I am now.", "title": "" }, { "docid": "3195c837f59cdeb66273957d4c640161", "text": "If you take the statement you quote as stated, it is indeed absurd. Unless you have a really creative tax accountant or live in a country with very unusual tax laws, any tax deduction you get for mortgage interest is going to be less than the interest. You don't come out ahead by getting a $25 deduction if you had a $100 expense to get that deduction. Where there can be some sense behind such a statement is if you consider the alternative to paying cash for a house or making extra payments against a mortgage. If you had $100,000 in cash in a box under your bed, and the choice is between, (a) use that $100,000 to buy a house in cash, or (b) borrow $100,000 at 6% interest and leave that cash in the box under the bed, than clearly (a) is the better choice because it saves you the interest expense. But if the choice is between, (a) buy a house for $100,000 in cash and borrow $100,000 at 6% to buy a car; or (b) borrow $100,000 at 6% interest to buy a house and use the $100,000 cash to buy the car, (b) is the better choice. The home mortgage loan is tax deductible; the car loan is not. As others have pointed out, if instead of using some extra cash to pay down the principle on your mortgage you used that money to invest in the stock market, it is likely that you would get better returns on the investment than what you would have saved in interest on the mortgage -- depending, of course, on how the market is doing and how well you pick stocks. But the key issue there isn't the tax deduction, it's the comparison of the profits from the investment versus the opportunity cost of the money that could have been saved on the mortgage interest. The tax deduction affects that comparison by effectively reducing the interest rate on the mortgage -- your real interest expense is the nominal interest minus the deduction -- but that's not the key point, just another number to plug in to the formula. By the way, given the complexity of U.S. tax law, I would not rule out the possibility that there could be some scenario where you really would save money by having mortgage interest. There are lots of deductions and credits that are phased out or eliminated as your income goes up. Perhaps you could find some set of tax laws that apply to you such that having an additional $1000 in interest expense lets you take a $300 deduction here and a $500 credit there, etc, and they add up to more than $1000. I don't know if that could actually happen, but the rules are complicated enough that, maybe. Any tax accountants here who can come up with such a scenario?", "title": "" }, { "docid": "f5d03797d7499736c830449098a393c1", "text": "\"Is all interest on a first time home deductible on taxes? What does that even mean? If I pay $14,000 in taxes will My taxes be $14,000 less. Will my taxable income by that much less? If you use the standard deduction in the US (assuming United States), you will have 0 benefit from a mortgage. If you itemize deductions, then your interest paid (not principal) and your property tax paid is deductible and reduces your income for tax purposes. If your marginal tax rate is 25% and you pay $10000 in interest and property tax, then when you file your taxes, you'll owe (or get a refund) of $2500 (marginal tax rate * (amount of interest + property tax)). I have heard the term \"\"The equity on your home is like a bank\"\". What does that mean? I suppose I could borrow using the equity in my home as collateral? If you pay an extra $500 to your mortgage, then your equity in your house goes up by $500 as well. When you pay down the principal by $500 on a car loan (depreciating asset) you end up with less than $500 in value in the car because the car's value is going down. When you do the same in an appreciating asset, you still have that money available to you though you either need to sell or get a loan to use that money. Are there any other general benefits that would drive me from paying $800 in rent, to owning a house? There are several other benefits. These are a few of the positives, but know that there are many negatives to home ownership and the cost of real estate transactions usually dictate that buying doesn't make sense until you want to stay put for 5-7 years. A shorter duration than that usually are better served by renting. The amount of maintenance on a house you own is almost always under estimated by new home owners.\"", "title": "" }, { "docid": "6717866315a55e750928ea6245ad3f8b", "text": "I don't quite understand your thought process here. First, in a tax-advantaged retirement account you are NOT allowed to engage in a transaction with yourself. If you just want to run a business and be able to write off expenses, how is using the self-directed IRA relevant? You can either buy the condo using your tax-advantaged account and rent it out to regular tenants. Or you buy the condo yourself using your own money and then operate your business so you can deduct business expenses from doing so. 401k's allow you to take a loan out of it, so you can look into that as well.", "title": "" }, { "docid": "f86aff035b0ccc3e9a474f3878d5a5d1", "text": "\"If you are investing in a mortgage strictly to avoid taxes, the answer is \"\"pay cash now.\"\" A mortgage buys you flexibility, but at the cost of long term security, and in most cases, an overall decrease in wealth too. At a very basic level, I have to ask anyone why they would pay a bank a dollar in order to avoid paying the government 28 - 36 cents depending on your tax rate. After all, one can only deduct interest- not principal. Interest is like rent, it accrues strictly to the lender, not equity. In theory the recipient should be irrelevant. If you have a need to stiff the government, go ahead. Just realize you making a banker three times as happy. Additionally the peace of mind that comes from having a house that no banker can take away from you is, at least for me, compelling. If I have a $300,000 house with no mortgage, no payments, etc. I feel quite safe. Even if my money is tied up in equity, if a serious situation came along (say a huge doctors bill) I always have the option of a reverse mortgage later on. So, to directly counter other claims, yes, I'd rather have $300k in equity then $50k in equity and $225k in liquid assets. (Did you notice that the total net worth is $25k less? And that's even before one considers the cash flow implication of a continuing mortgage. I have no mortgage, and I'm 41. I have a lot of net worth, but the thing that I really like is that I have a roof over my head that no on e can take away from me, and sufficient savings to weather most crises). That said, a mortgage is not about total cost. It is about cash flow. To the extent that a mortgage makes your cash flow situation better, it provides a benefit- just not one that is quantifiable in dollars and cents. Rather, it is a risk/reward situation. By taking a mortgage even when you have the cash, you pay a premium (the interest rate) in order to have your funds available when you need it. A very simple strategy to calculate and/or minimize this risk would be to invest the funds in another investment. If your rate of return exceeds the interest rate minus any tax preference (e.g. 4% minus say a 25% deduction = 3%), your money is better off there, obviously. And, indeed, when interest rates are only 4%, it may may be possible to find that. That said, in most instances, a CD or an inflation protected bond or so won't give you that rate of return. There, you'd need to look at stocks- slightly more risky. When interest rates are back to normal- say 5 or 6%, it gets even harder. If you could, however, find a better return than the effective interest rate, it makes the most sense to do that investment, hold it as a hedge to pay off the mortgage (see, you get your security back if you decide not to work!), and pocket the difference. If you can't do that, your only real reason to hold the cash should be the cash flow situation.\"", "title": "" }, { "docid": "266260faec9cc263180d42275dbabe8c", "text": "Those choices aren't mutually exclusive. Yes, most discussion of the mortgage interest deduction ignores the fact that for a standard itemizer, much, if not all of this deduction can be lost. For 2011, the std deduction for a single is $5,800. It's not just mortgage interest that's deductible, state income tax, realestate tax, and charitable contributions are among the other deductions. If this house is worth $350K, the property tax is about $5K, and since it's not optional, I'd be inclined to assume that it's the deduction that offsets the std deduction. Most states have an income tax, which tops off the rest. You are welcome to toss this aside as sophistry, but I view it as these other deductions as 'lost' first. I'm married, and our property tax is more than our standard deduction, so when doing the math, the mortgage is fully deductible, as are our contributions. In your case, the numbers may play out differently. No state tax? Great, so it's the property tax and deductions you'd add up first and decide on the value the mortgage deduction brings. Last, I don't have my mortgage for the deduction, I just believe that long term my other investments will exceed, after tax, the cost of that mortgage.", "title": "" }, { "docid": "f1ff5d7f06d8a06b0207de6b3ce632e1", "text": "It would only make sense to repay the HBP faster if you knew your marginal tax rate would be increasing in the future. It sounds like that is not the case. By repaying it sooner with borrowed money, you are paying extra interest and potentially increasing your marginal tax rate. Probably not a good plan unless you know your taxable income will increase for other reasons in the next couple years.", "title": "" }, { "docid": "f92d195707bc8910972f6def5a6b7f6d", "text": "It's important because you may be able to reduce the total amount of interest paid (by paying the loan faster); but you can do nothing to reduce the total of your principal repayments. The distinction can also affect the amount of tax you have to pay. Some kinds of interest payments can be counted as business expenses, which means that they reduce the amount of income you have to pay tax on. But this is not generally the case for money used to repay the loan principal.", "title": "" }, { "docid": "92d76900c4a92b59eb12e74a8507acda", "text": "As others have suggested, if you're considering taking a 50% discount on a revenue stream you feel is low risk because you're having cash flow issues paying those property taxes - I'd recommend you seriously separating these two unrelated concerns and deal with each in most financially astute manner individually. You'll keep more of your hard earned cash You don't have the hassle factor and uncertainty of trying to become proficient in an esoteric field of financial knowledge by Christmas!", "title": "" }, { "docid": "3a8501ffd0029873ce04c5d31e4c59d2", "text": "The principal of the loan itself isn't any sort of taxable event. There are, however, two taxable events here. First, cashing out your 401(k). That income wasn't originally taxed, so it will be now, as regular income. Plus, you're going to pay a 10% penalty, assuming you're under 59.5 years of age. Second, when the business pays you interest, that interest will be taxable. The principal is not taxable; that's not income, after all. You simply are getting back what's yours. The interest is taxable, as that is the actual income here.", "title": "" }, { "docid": "309cfe3599915bf4a193f66e589a27ef", "text": "\"You need to do a bit more research and as @littleadv often wisely advises, consult a professional, in this case a tax layer or CPA. You are not allowed to just pull money out of a property and write off the interest. From Deducting Mortgage Interest FAQs If you own rental property and borrow against it to buy a home, the interest does not qualify as mortgage interest because the loan is not secured by the home itself. Interest paid on that loan can't be deducted as a rental expense either, because the funds were not used for the rental property. The interest expense is actually considered personal interest, which is no longer deductible. This is not exactly your situation of course, but it illustrates the restriction that will apply to you. Elsewhere in the article, it references how, if used for a business, the interest deduction still will not apply to the rental, but to the business via schedule C. In your case, it's worse, you can never deduct interest used to fund a tax free bond, or to invest in such a tax favored product. Putting the facts aside, I often use the line \"\"don't let the tax tail wag the investing dog.\"\" Borrowing in order to reduce taxes is rarely a wise move. If you look at the interest on the 90K vs 290K, you'll see you are paying, in effect, 5.12% on the extra 200K, due the higher rate on the entire sum. Elsewhere on this board, there are members who would say that given the choice to invest or pay off a 4% mortgage, paying it off is guaranteed, and the wiser thing to do. I think there's a fine line and might not be so quick to pay that loan off, an after-tax 3% cost of borrowing is barely higher than inflation. But to borrow at over 5% to invest in an annuity product whose terms you didn't disclose, does seem right to me. Borrow to invest in the next property? That's another story.\"", "title": "" }, { "docid": "605842993bf7c451b0f12c45806e8a78", "text": "First, I would point you to this question: Oversimplify it for me: the correct order of investing With the $50k that you have inherited, you have enough money to pay off all your debt ($40k), purchase a functional used car ($5k), and get a great start on an emergency fund with the rest. There are many who would tell you to wait as long as possible to pay off your student loans and invest the money instead. However, I would pay off the loans right away if I were you. Even if it is low interest right now, it is still a debt that needs to be paid back. Pay it off, and you won't have this debt hanging over your head anymore. Your grandmother has given you an incredible gift. This money can make you completely debt free and put you on a path for success. However, if you aren't careful, you could end up back in debt quickly. Learn how to make a budget, and commit to never spending money that you don't have again.", "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": "" } ]	fiqa
340760059fd864208a32806bf1648136	Are car buying services worth it?	[ { "docid": "40b2b3a47d011c6b8410fc6fae9440ff", "text": "I have used car buying services through Costco and USAA. Twice with a Ford, and once with a Honda. In all instances I was directed to sales people that were uncommonly friendly and pleasant to work with. I was given a deep discount without any negotiation. In two of the three cases I did not have a trade. In one case I had a trade, and negotiated a deeper discount then was originally offered. Did I get a good deal? Eh, who knows? Really it depends what your goal is. If your goal is to avoid negotiation, avoid idiot salesmen, and receive a good discount then a quality car buying service may be for you. My research, a few years old, indicated Costco's program was better then the USAA one. If your goal is get a deep as a discount as possible on a new car, well then you have some work cut out for you. Keep some hand sanitizer handy when you meet one of the slime ball salesmen. Keep in mind that not everyone understand the difference between the words value and cheap. If your goal is to pay as little as possible for quality transportation. Avoid most dealers and new cars. But I don't think that is what you are looking for.", "title": "" }, { "docid": "1495c43f88e687ac41a3febea399f557", "text": "I haven't heard of these before! (And I'm on the board of a Credit Union.) The 0.99% on loans is great. It's especially great on a used car: the steep part of the depreciation curve was paid by the first owner. The network probably have a business relationship with the credit union. Credit unions do indirect lending -- approval of loans that happens at the point of sale, which then the credit union gets as assets. Depending on the cost of that program, it probably won't hurt. Your credit union wants to keep your business, because they know that you have a lot of options for where you bank and where you get loans.", "title": "" }, { "docid": "4ab468d6c909b04f3f51271c324bf202", "text": "The buying service your credit union uses is similar to the one my credit union uses. I have used their service several times. There is no direct cost to use the service, though the credit union as a whole might have a fee to join the service. I have used it 4 times over the decades. If you know what make and model you want to purchase, or at least have it narrowed down to just a few choices, you can get an exact price for that make, model, and options. You do this before negotiating a price. You are then issued a certificate. You have to go to a specific salesman at a specific dealership, but near a large city there will be several dealers to pick from. There is no negotiating at the dealership. You still have to deal with a trade in, and the financing option: dealer, credit union, or cash. But it is nice to not have to negotiate on the price. Of course there is nobody to stop you from using the price from the buying service as a goal when visiting a more conveniently located dealership, that is what I did last time. The first couple of times I used the standard credit union financing, and the last time I didn't need a loan. Even if you don't use the buying service, one way to pay for the car is to get the loan from the credit union, but get the rebate from the dealer. Many times if you get the low dealer financing you can't get the rebate. Doing it this way actually saves money. Speaking of rebates see how the buying service addresses them. The big national rebates were still honored during at least one of my purchases. So it turned out to be the buying service price minus $1,000. If your service worked like my experience, the cost to you was a little time to get the price, and a little time in a different dealer to verify that the price was good.", "title": "" }, { "docid": "a4ba5e51fd8922bc9ec409eb2d8bcf44", "text": "Depends on how you value your time. These programs do not say they will get you the lowest basement price; they say you get a reasonable price without negotiation. This is true. Use a service. Pick out the car you want and spend less than an afternoon picking up your vehicle. You don't have to fret or do all of the price research or comparison shopping because that is what the service does for you. Since you have to pick a make and model before you begin AND because you need to arrange your financing at a credit union before you being (regardless of a buying service) I don't think they actually work out financially for most folks. My anecdote: Because we were buying an already inexpensive new car, the Costco pre-negotiated discount was just a few hundred bucks. The discount is different for each car (naturally). Our base model was terrific in consumer reports, but the sticker price doesn't leave dealerships a lot of room for profit to start with. We ended up saving a couple thousand dollars by skipping the Costco program and following these tips from JohnFX: What are some tips for getting the upper hand in car price negotiations? But we did it all over email. We emailed any dealership we could find online that was in driving distance. (There were literally dozens of dealerships to choose from.) We made a new, throw away email address and starting to ask for a lower price. Whenever we got a lower price, we simply asked the others to beat it. All over email. It only took a few days, we know we got a low price and the stress really wasn't a factor. (A couple of the salespeople got a little rude, but it was over the email so we didn't care or fret.) I had time to kill, and the extra hassle and effort saved me much more money.", "title": "" }, { "docid": "8ee017962181beff587327afbd07a4c6", "text": "\"I went through the Costco program for the so-called \"\"no-hassle\"\" bargain price when I bought my Prius. According to other Prius owners that I've met on forums and TrueCar's web site, I paid \"\"average.\"\" Lots of people in my area managed to negotiate a better price by $1-2k. So much for getting a deal. I do not plan to use Costco to buy another vehicle again.\"", "title": "" } ]	[ { "docid": "168704f710afdf153cf1d910d90c06eb", "text": "\"You can greatly reduce the risk if you can line up a buyer prior to purchasing the car. That kind of thing is common in business, one example is drop shipping. Also there are sales companies that specialize in these kinds of things bringing manufacturers of goods together with customers. The sales companies never take delivery of the product, just a commission on the sales. From this the manufacturers are served as they have gained a customer for their goods. The buying company is served as they can make a \"\"better\"\" end product. The two parties may have not been brought together had it not been for the sales company so on some level both are happy to pay for the service. Can you find market inequalities and profit from them? Sure. I missed a great opportunity recently. I purchased a name brand shirt from a discount store for $20. Those shirts typically sell on ebay for $80. I should have cleaned out that store's inventory, and I bet someone else did as by the time I went back they were gone. That kind of thing was almost risk-less because if the shirts did not sell, I could simply return them for the full purchase price. That and I can afford to buy a few hundred dollars worth of shirts. Can you afford to float 45K CDN? What if it takes a year to sell the car? What if the economy goes sour and you are left \"\"holding the bag\"\"? Why are not car dealers doing exactly what you propose? Here in the US this type of thing is called \"\"horse trading\"\" and is very common. I've both lost and made money on these kind of deals. I would never put a significant amount of my net worth at risk.\"", "title": "" }, { "docid": "5493c7944b022ecf3075500fc2deeafc", "text": "Yes, maybe. Sometimes the mother company (that makes the car) covers a bit of the loss that comes from the super-offer loan, so the dealer loses a bit less. But generally, you are right. you should be able to talk them into some rebate that gets you around the given number, depending on how good you are a negotiator (and how urgently they need to sell a car)", "title": "" }, { "docid": "1d1b257f29aaef270074323d88d51d45", "text": "The good debt/bad debt paradigm only applies if you are considering this as a pure investment situation and not factoring in: A house is something you live in and a car is something you use for transportation. These are not substitutes for each other! While you can live in your car in a pinch, you can't take your house to the shops. Looking at the car, I will simplify it to 3 options: You can now make a list of pros and cons for each one and decide the value you place on each of them. E.g. public transport will add 5h travel time per week @ $X per hour (how much you value your leisure time), an expensive car will make me feel good and I value that at $Y. For each option, put all the benefits together - this is the value of that option to you. Then put all of the costs together - this is what the option costs you. Then make a decision on which is the best value for you. Once you have decided which option is best for you then you can consider how you will fund it.", "title": "" }, { "docid": "f3f2aad762151eb6ec61c7d1dc1e7383", "text": "If it costs more to fix the car than the car is worth, then those repairs are not worth it. Hit craigslist and look for another junker that runs, but is in your cash price range. Pay to get it looked at by a mechanic as a condition of sale. Use consumer reports to try and find a good model. Somebody in your position does not need a $15K car. You need a series of $2K or $4K cars that you will replace more often, but pay cash for. Car buying, especially from a dealer financed, place isn't how I would recommend building your credit back up. EDIT in response to your updates: Build your credit the smart way, by not paying interest charges. Use your lower limit card, and annually apply for more credit, which you use and pay off each and every month. Borrowing is not going to help you. Just because you can afford to make payments, doesn't automatically make payments a wise decision. You have to examine the value of the loan, not what the payments are. Shop for a good price, shop for a good rate, then purchase. The amount you can pay every month should only be a factor than can kill the deal, not allow it. Pay cash for your vehicle until you can qualify for a low cost loan from a credit union or a bank. It is a waste of money and time to pay a penalty interest rate because you want to build your credit. Time is what will heal your credit score. If you really must borrow for the purchase, you must secure a loan prior to shopping for a car. Visit a few credit unions and get pre-qualified. Once you have a pre-approved loan in place, you can let the deal try and beat your loan for a better deal. Don't make the mistake of letting the dealer do all the financing first.", "title": "" }, { "docid": "57f6a21321eb433657690b4ba5c04fef", "text": "A lot of articles about this kind of thing ask you to do the simple math: $5k < $15k. If you've got a trustworthy mechanic, and you're looking to save money, it's simple, you're looking at $10k in savings, not even counting interest, higher insurance, etc. On the other hand, if you're just lusting after a new car, and don't mind spending the extra money, then why not? As you mentioned, however, if you think you'll get at least the value of your repair back, you might as well get the car repaired for $5k, so you'll be able to get around town. If you still decide you want a new car, then you'll have a trade-in worth $6500 instead of $1500.", "title": "" }, { "docid": "2a4035dd53cf08a9a1e6622434653193", "text": "As someone who was just recently a salesman at Honda, I'd recommend buying a Honda instead :). If you really prefer your Toyota, I always found quote-aggregation services (Truecar, I'm blanking on others) very competitive in their pricing. Alternatively, you could email several dealerships requesting a final sale price inclusive of taxes and tags with the make, model, and accessories you'd wish to purchase, and buy the vehicle from them if your local dealership won't match that price. Please keep in mind this is only persuasive to your local dealership if said competitors are in the same market area (nobody will care if you have a quote from out-of-state). As many other commenters noted, you should arrange your own financing. A staple of the sales process is switching a customer to in-house financing, but this occurs when the dealership offers you better terms than you are getting on your own. So allow them the chance to earn the financing, but don't feel obligated to take it if it doesn't make sense fiscally.", "title": "" }, { "docid": "d9c0885f99984679d899289342d7c883", "text": "\"Uh, you want to lease a car through a dealer? That is the worst possible way to obtain a car. Dealers love leases because it allows them to sell a car for an unnegotiated price and to hide additional fees. It's the most profitable kind of sale for them. The best option would be to buy a used car off of Craigslist or eBay, then sell it again the same way when you leave. If you sell the car for what you paid, then you get the car for a year for free. If you are determined to go through with the expensive, risky and annoying plan of leasing a car, then you should use a leasing agent. I recommend reading some car buying guides before going out into the wilderness with the tigers and bears. Comment on Leasing Tricks Don't get tricked by the \"\"interest rate\"\" game. The whole interest thing is just a distraction to trick you into think you are getting some kind of reasonable deal. The leasing company makes most of their money from fees. For example, if you get into an accident it is a big payday for them. The average person thinks they will never get into an accident, but the reality is that most people get into an accident sooner or later. They also collect big penalties for \"\"maintenance failures\"\". Forget to change the oil? BOOM! money. Forget to comply with manufacture recall? BOOM! more money. Forget to do the annual service? BOOM! more money. Scratch the car? BOOM! more money. The original car mats are missing? BOOM! you just paid $400 for a set of mats that cost the leasing company $25 bucks. The leasing company is counting on the fact that 99% of people will not maintain the car correctly or will damage it in some way. They also usually have all kinds of other bogus fees, so-called \"\"walk-away fees\"\", \"\"disposition fees\"\", \"\"initiation fees\"\". Whatever they think they can get away with. The whole system is calculated to screw you.\"", "title": "" }, { "docid": "833192fa2624bd4fca23f6210fe60398", "text": "It is almost never going to be more economical to buy a new car versus repairing your current car. If you want a new car, that is justification enough.", "title": "" }, { "docid": "d4fcfcb0038f0f3aa19f98a535bdf044", "text": "The .9% looks great, but it's not as relevant as the cost of the car itself. There are those who believe that one should never own a new car, that the first X years/miles of a car's life are the most expensive. The real question is how your budget is allocated. Is the car payment a small sliver or a large slice? How big is the housing wedge?", "title": "" }, { "docid": "ab573c1f875dcbc6bc45473c81083849", "text": "\"A while back I sold cars for a living. Over the course of 4 years I worked for 3 different dealerships. I sold new cars at 2 and used at the last one. When selling new cars I found that the majority of people buying the higher end cars honestly shouldn't have been - 80%+. They almost always came in owing more on their trades then they were worth, put down very little cash and were close to being financially strapped. From a financial perspective these deals were hard to close, not because the buyer was picky but rather because their finances were a mess. Fully half, and probably more, we had to switch from the car they initially wanted down to a much cheaper version or try to convert to a lease because it was the only way the bank would loan the money. We called them \"\"$30,000 millionaires\"\" because they didn't make a whole lot but tried to look like they did. As a salesman you knew you were in serious trouble when they didn't even try to negotiate. Around 2% of the deals I did were actual cash deals - meaning honest cash, not those who came in with a pre-approved loan from a bank. These were invariably for used cars about 3 to 4 years old and they never had a trade in. The people doing this always looked comfortable but never dressed up, you wouldn't even look at them twice. The negotiations were hard because they knew exactly how much that car should go for and wouldn't even pay that. It was obvious they knew the value of money. That said, I've been in the top 3% of wage earners for about 20 years and at no point have I considered myself in a position to \"\"afford\"\" a new \"\"luxury\"\" car. IMHO, there are far more important things you can do with that kind of money.\"", "title": "" }, { "docid": "c5778c02b5f7bc25fa3180e5e555eb28", "text": "It depends completely on the car. Some cars retain their value much better, and others drop in value like a rock (no pun intended). The mileage and condition on a car also has a huge impact on value. According to this site, cars on average lose 46% of their value in three years, so seeing one that drops 62% in roughly 3 years does not seem impossible. That value could also have been trade-in value, which is significantly lower than what you could get with a private party sale (or what you'd pay to get that same car from a dealer) One example: a new Ford Taurus (lowest model) has a Kelly Blue Book value of $28,000. A 2014 Taurus (lowest model) with average mileage and in fair condition has a private party value of about $12,000, for a 57% drop in value. Note: I picked Taurus because it's a car that should not have exceptional resale value (unlike BMW, trucks, SUVs), not to make any kind of judgement of the quality or resellability of the car)", "title": "" }, { "docid": "0023829af08e1f223028c03a4ed6db45", "text": "You are really showing some wisdom here, and congratulations on finishing college. Its a lot about likelihoods. If you buy a new car, there is something like a 99.5% chance you will get a car that will not need repairs. If you buy a car for $1200 there is probably a 20% chance that the car will only need minimal repairs. So the answer is there is no real guarantee that spending any amount of money you will end up with a car with no repairs. You also can't assume that with buying a car it will immediately need repairs. Its possible, that you could spend 1200 on a car and it will need an oil change. In three months it might need brakes and in 6 months tires. If that is the case, you could save up the money for repairs. Have you looked for a car? It will take some work, but you might be able to find something in good condition for your budget. If you shop for a loan, go with a good credit union or local bank. Mostly you are looking for a low rate. However, I would advise against it. You worked so hard on getting out of school without debt, why start now? Be weird and buy a car for cash. Heck someone may be able to loan you a car for a short time while you save some money.", "title": "" }, { "docid": "2919c190f77c6fcd8ce36391a3349eb2", "text": "It is the best company of business valuation services. This expert has been working in the Automotive dealership expert witness industry for long years. The Kirk Kleckner offers an exceptional form of the fee, which includes enterprise valuation, car valuation, and professional Automotive dealership expert witness. Deals happening at automobile dealerships can be inspired via the monetary matters of the auto commercial enterprise and in addition singular automobile examinations.", "title": "" }, { "docid": "f95bc581a3d4e6fe834469a1a551bbe3", "text": "\"It is a legitimate practice. The dealers do get the loan money \"\"up front\"\" because they're not holding the loan themselves; they promptly sell it to someone else or (more commonly) just act as salesmen for a lending institution and take their profit as commission or origination fees. The combined deal is often not a good choice for the consumer, though. Remember that the dealer's goal is to close a sale with maximum profit. If they're offering to drop the price $2k, they either didn't expect to actually get that price in the first place, or expect at least $2k of profit from the loan, or some combination of these. Standard advice is to negotiate price, loan, and trade-in separately. First get the dealer's best price on the car, compare it to other dealer and other cars, and walk away if you don't like their offer. Repeat for the loan, checking the dealer's offer against banks/credit unions available to you. If you have an older car to unload, get quotes for it and consider whether you might do better selling it yourself. ========= Standard unsolicited plug for Consumef Reports' \"\"car facts\"\" service, if you're buying a new car (which isn't usually the best option; late-model used is generally a better value). For a small fee, they can tell you what the dealer's real cost of a car is, after all the hidden incentives and rebates. That lets you negotiate directly on how much profit they need on this sale... and focuses their attention on the fact that the time they spend haggling with you is time they could be using to sell the next one. Simply walking into the dealer with this printout in your hand cuts out a lot of nonsense. The one time I bought new, I basically walked in and said \"\"It's the end of the model year. I'll give you $500 profit to take one of those off your hands before the new ones come in, if you've got one configured the way I want it.\"\" Closed the deal on the spot; the only concession I had to make was on color. It doesn't always work; some salesmen are idiots. In that case you walk away and try another dealer. (I am not affiliated in any way with CU or the automotive or lending industries, except as customer. And, yes, this touch keyboard is typo-prone.)\"", "title": "" }, { "docid": "0758355d344165dedfb84f9bc539cca1", "text": "This sounds more like a behavioral than a debit card issue to me TBH. Did you put the money you're putting away into a separate savings account that you (mentally) labelled 'for investment'? That's pretty much what I do (and I have a couple of savings accounts for exactly that reason) and even though I know I've got $x in the savings accounts, the debit card I carry only lets me spend money from my main bank account. By the time I've transferred the money, the urge to spend has usually gone away, even though it often only takes seconds to make the transfer.", "title": "" } ]	fiqa
a16f2bdad3a189b0a53218b5a4567a9f	Is avoiding fees commonly found with CFD trading possible?	[ { "docid": "d0cc13ef145f91201aedca65af758d3a", "text": "The fees with trading CFDs are usually lower than standard share trading. There is usually no joining fee to join a broker and start trading with them, you must be talking about the minimum required to fund your account to trade with. What country are you in? Because if you are in the USA I believe CFD trading is not allowed there. Also there is no margin fee associated with trading CFDs. The margin is what you put in to buy or sell the CFD when you open a position. For example if you were to open a position in a share CFD where the underlying share had a price of $10 and you were looking to buy 1000 units. To buy the shares outright your outlay would be $10000 plus brokerage. If the CFD provider had a 10% margin on these share, then your initial margin to open a CFD position would be 10% of $10000 or $1000. If the price of the shares went up to $11 and you sold the shares you would get $11000 ($1000 profit), if you sold the CFDs you would get $2000 ($1000 profit). If on the other hand the shares went down to $9 and you sold the shares you would get $9000 ($1000 loss), if you sold the CFDs you would get $0 ($1000 loss). You have to be careful with margin, it is a two edged sword - it can multiply your gains as well as multiply your losses. The only fees you should be charged with CFDs is brokerage (which should be less than for share trading), and overnight financing costs. This is charged for everyday you hold a long position overnight. You should not be charge any overnight financing cost for holding short positions overnight, and if interest rates were higher you might actually get paid an overnight financing for holding short positions overnight. You may have been closed out of your bitcoin position because you didn't have enough funds in your trading account to open the size trade that you opened. From your question it seems like you are not ready to trade CFDs, you should really learn more about CFDs and the trading platform/s you plan to use before trading with your valuable money. You could probably open up a simulation account whilst you are learning the ropes and become more familiar with the trading platform and with CFDs. And if you are not sure about something ask your broker, they usually have training videos and seminars.", "title": "" } ]	[ { "docid": "9a2fb8987853dd7bb42da0a18d64dd5a", "text": "The ETF price quoted on the stock exchange is in principle not referenced to NAV. The fund administrator will calculate and publish the NAV net of all fees, but the ETF price you see is determined by the market just like for any other security. Having said that, the market will not normally deviate greatly from the NAV of the fund, so you can safely assume that ETF quoted price is net of relevant fees.", "title": "" }, { "docid": "9adf292a5fb58e5fed098aa9bcd6d516", "text": "Retail brokers and are generally not members of exchanges and would generally not be members of exchanges unless they are directly routing orders to those exchanges. Most retail brokers charging $7 are considered discount brokers and such brokers route order to Market Makers (who are members of the exchanges). All brokers and market makers must be members of FINRA and must pay FINRA registration and licensing fees. Discount brokers also have operational costs which include the cost of their facilities, technology, clearing fees, regulation and human capital. Market makers will have the same costs but the cost of technology is probably much higher. Discount brokers will also have market data fees which they will have to pay to the exchanges for the right to show customer real time quotes. Some of their fees can be offset through payment for order flow (POF) where market makers pay routing brokers a small fee for sending orders to them for execution. The practice of POF has actually allowed retail brokers to keep their costs lower but to to shrinking margins and spread market makers POF has significantly declined over the years. Markets makers generally do not pass along Exchange access fees which are capped at $.003 (not .0035) to routing brokers. Also note that The SEC and FINRA charges transactions fees. SEC fee for sales are generally passed along to customers and noted on trade confirms. FINRA TAF is born by the market makers and often subtracted from POF paid to routing firms. Other (full service brokers) charging higher commissions are charging for the added value of their brokers providing advice and expertise in helping investors with investment strategies. They will generally also have the same fees associated with membership of all the exchanges as they are also market makers subject to some of the list of cost mentioned above. One point of note is that Market Making technology is quite sophisticates and very expensive. It has driven most of wholesale market makers of the 90s into consolidation. Retail routing firm's save a significant amount of money for not having to operate such a system (as well as worry about the regulatory headaches associated with running such a system). This allows them to provide much lower commissions that the (full service) or bulge bracket brokers.", "title": "" }, { "docid": "1d78a5b716489ff3fa60038e90e411c1", "text": "\"Don't put money in things that you don't understand. ETFs won't kill you, ignorance will. The leveraged ultra long/short ETFs hold swaps that are essentially bets on the daily performance of the market. There is no guarantee that they will perform as designed at all, and they frequently do not. IIRC, in most cases, you shouldn't even be holding these things overnight. There aren't any hidden fees, but derivative risk can wipe out portions of the portfolio, and since the main \"\"asset\"\" in an ultra long/short ETF are swaps, you're also subject to counterparty risk -- if the investment bank the fund made its bet with cannot meet it's obligation, you're may lost alot of money. You need to read the prospectus carefully. The propectus re: strategy. The Fund seeks daily investment results, before fees and expenses, that correspond to twice the inverse (-2x) of the daily performance of the Index. The Fund does not seek to achieve its stated investment objective over a period of time greater than a single day. The prospectus re: risk. Because of daily rebalancing and the compounding of each day’s return over time, the return of the Fund for periods longer than a single day will be the result of each day’s returns compounded over the period, which will very likely differ from twice the inverse (-2x) of the return of the Index over the same period. A Fund will lose money if the Index performance is flat over time, and it is possible that the Fund will lose money over time even if the Index’s performance decreases, as a result of daily rebalancing, the Index’s volatility and the effects of compounding. See “Principal Risks” If you want to hedge your investments over a longer period of time, you should look at more traditional strategies, like options. If you don't have the money to make an option strategy work, you probably can't afford to speculate with leveraged ETFs either.\"", "title": "" }, { "docid": "618a3e2994080b42870518e5c9ec136c", "text": "\"This answer is somewhat incomplete as I don't have definitive conclusions about some parts of your question. Your question includes some very specific subquestions that may best be answered by contacting the investment companies you're considering. I don't see any explicit statement of fees for TIAA-CREF either. I suggest you contact them and ask. There is mention on the site of no-transaction-fee funds (NTF), but I wasn't able to find a list of such funds. Again, you might have to ask. Vanguard also offers some non-Vanguard funds without transaction fees. If you go the Vanguard page on other mutual funds you can use the dropdown on the right to select other fund companies. Those with \"\"NTF\"\" by the name have no transaction fees. Scottrade also offers NTF funds. You can use their screener and select \"\"no load\"\" and \"\"no transaction fee\"\" as some of your filters. You are correct that you want to choose an option that will offer a good lineup of funds that you can buy without transaction fees. However, as the links above show, Vanguard and TIAA-CREF are not the only such options. My impression is that almost any firm that has their own funds will sell them (or at least some of them) to you without a transaction fee. Also, as shown above, many places will sell you other companies' funds for free too. You have plenty of options as far as free trades, so it really depends on what funds you like. If you google for IRA providers you will find more than you can shake a stick at. If you're interested in low-cost index funds, Vanguard is pretty clearly the leader in that area as their entire business is built around that concept. TIAA-CREF is another option, as is Fideltiy (which you didn't mention), and innumerable others. Realistically, though, you probably don't need a gigantic lineup of funds. If you're juggling money between more than a handful of funds, your investment scheme is probably needlessly complex. The standard advice is to decide on a broad allocation of money into different asset classes (e.g., US stocks, US bonds, international stocks, international bonds), find a place that offers funds in those areas with low fees and forget about all the other funds.\"", "title": "" }, { "docid": "7e5ef408b369bd0e58561c847ea9d703", "text": "\"Other than the brokerage fee you should also consider the following: Some brokerages provide extra protection against the these and as you guessed it for a fee. However, there could be a small bonus associated with your trading at scale: You are probably qualified for rebates from the exchanges for generating liquidity. \"\"Fees and Credits applicable to Designated Market Makers (“DMMs”)\"\" https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf All in all, I will say that it will be really hard for you to avoid paying brokerage fee and yes, even Buffet pays it.\"", "title": "" }, { "docid": "707b7a5a7259093c1d03ce2ee737eda1", "text": "CFDs should not be used as a buy and hold strategy (which is risky enough doing with shares directly). However, with proper money and risk management and the proper use of stop losses, a medium term strategy is very plausible. I was using CFDs in the past over a short time period of usually between a couple of days to a couple is weeks, trying to catch small swings with very tight stops. I kept getting wipsawed due to my stops being too tight so had too many small loses for my few bigger wins. And yes I lost some money, almost $5k in one year. I have recently started a more medium term strategy with wider stops trying to catch trending stocks. I have only recently started this strategy and so far have 2 loses and 3 wins. Just remember that you do get charged a financing fee for holding long position overnight, buy for short position you actually get paid the funding fee for overnight positions. My broker charges the official interest rate + 2.5% for long positions and pays the official rate - 2.5% for short positions. So yes CFDs can be used for the longer term as long as you are implementing proper money and risk management and use stop losses. Just be aware of the implications of using margin and all the costs involved.", "title": "" }, { "docid": "f05e7457666194747ad2a2fffb8275aa", "text": "Now the question: is advisable for a beginner to speculate in CfDs? No. If not, is there a better way to invest with a small amount of money? In the US, and I'm sure this carries to the UK, most (if not all) big brokerages (Schwab, TD Ameritrade, Fidelity, Vanguard, etc) have a set of funds that are zero load and zero commission though the fund will still have an expense ratio. This is the Barclay's UK page related to zero cost investing in the Barclay's funds. Barclay's might not be the right fit for a beginner as it seems there is a hefty account minimum, but the same zero commission concept exists in the UK. Again, most of these brokerages will also have an extremely low expense ratio S&P index (or some other market index) fund. As a beginner that's where you should start. This is not meant to patronize beginners, it's just math. Assume your trade commission is £7. If your investment is £100, you'll lose £7 right up front to the buy commission, then another £7 when you sell. Lets say your position raises 10%, you'll be at a net loss of 4.7%. Meanwhile if you put your £100 in to a 0.1% expense fee mutual fund with no transaction commissions and no load fees, after a 10% gain you'd owe £0.11 due to the expense ratio at the of the year. You'd have £109.89. Beginners get crushed by fees and commission. It is not advisable, by any stretch of the imagination, to attempt to day trade or actively manage a portfolio of any sort of security; and commodities and currency are the WORST place to start.", "title": "" }, { "docid": "0a7ace8f106dc0b13a9d2fc529f507e6", "text": "I doubt you're going to find anywhere that will give you free outgoing wires unless you're depositing a huge amount of money like $500K or more. An alternative would be to find a bank that offers everything else you want and use XETrade for very low cost online wires. I've used them in the past and can recommend their services. Most banks won't charge for incoming wires. I have accounts at ETrade Bank that don't charge any fees and I can do everything online. You might want to check them out. ETrade also offers global trading accounts which allow you to have accounts denominated in a few foreign currencies (EUR, JPY, GBP, CAD and HKD I think). I don't think there is a fee for moving money between the different currencies. If your goal is simply to diversify your money into different currencies, you could deposit money there instead of wiring it to other banks.", "title": "" }, { "docid": "11c296332c95a014ec99e1c7587390cc", "text": "I've worked at a bank, and even the best prop traders have low Sharpe ratios and large swings. I would advise that the average person without access to flow information does not a chance, and will end up losing eventually.", "title": "" }, { "docid": "c38fdb9c7f76677a4614faf0eaf2598a", "text": "\"You avoid pattern day trader status by trading e-mini futures through a futures broker. The PDT rules do not apply in the futures markets. Some of the markets that are available include representatives covering the major indices i.e the YM (DJIA), ES (S&P 500) and NQ (Nasdaq 100) and many more markets. You can take as many round-turn trades as you care to...as many or as few times a day as you like. E-mini futures contracts trade in sessions with \"\"transition\"\" times between sessions. -- Sessions begin Sunday evenings at 6 PM EST and are open through Monday evening at 5 PM EST...The next session begins at 6 pm Monday night running through Tuesday at 5 PM EST...etc...until Friday's session close at 5 PM EST. Just as with stocks, you can either buy first then sell (open and close a position) or short-sell (sell first then cover by buying). You profit (or lose) on a round turn trade in the same manor as you would if trading stocks, options, ETFs etc. The e-mini futures are different than the main futures markets that you may have seen traders working in the \"\"pits\"\" in Chicago...E-mini futures are totally electronic (no floor traders) and do not involve any potential delivery of the 'product'...They just require the closing of positions to end a transaction. A main difference is you need to maintain very little cash in your account in order to trade...$1000 or less per trade, per e-mini contract...You can trade just 1 contract at a time or as many contracts as you have the cash in your account to cover. \"\"Settlement\"\" is immediate upon closing out any position that you may have put on...No waiting for clearing before your next trade. If you want to hold an e-mini contract position over 2 or more sessions, you need to have about $5000 per contract in your account to cover the minimum margin requirement that comes into play during the transition between sessions... With the e-minis you are speculating on gaining from the difference between when you 'put-on' and \"\"close-out\"\" a position in order to profit. For example, if you think the DJIA is about to rise 20 points, you can buy 1 contract. If you were correct in your assessment and sold your contract after the e-mini rose 20 points, you profited $100. (For the DJIA e-mini, each 1 point 'tick' is valued at $5.00)\"", "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": "66dbe5aa78abf16b575a49b7483f9b3b", "text": "Yes it is viable but uncommon. As with everything to do with investment, you have to know what you are doing and must have a plan. I have been successful with long term trading of CFDs for about 4 years now. It is true that the cost of financing to hold positions long term cuts into profits but so do the spreads when you trade frequently. What I have found works well for me is maintaining a portfolio that is low volatility, (e.g. picking a mix of positions that are negatively correlated) has a good sharpe ratio, sound fundamentals (i.e. co-integrated assets - or at least fairly stable correlations) then leveraging a modest amount.", "title": "" }, { "docid": "4edef748c56d2e79148d229cce28d705", "text": "\"The issues of trading with unsettled funds are usually restricted to cash accounts. With margin, I've never personally heard of a rule that will catch you in this scenario. You won't be able to withdraw funds that are tied up in unsettled positions until the positions settle. You should be able to trade those funds. I've never heard of a broker charging margin interest on unsettled funds, but that doesn't mean there isn't a broker somewhere that does. Brokers are allowed to impose their own restrictions, however, since margin is basically offering you a line of credit. You should check to see if your broker has more restrictive rules. I'd guess that you may have heard about restrictions that apply to cash accounts and think they may also apply to margin accounts. If that's the case and you want to learn more about the rules generally, try searching for these terms: You should be able to find a lot of clear resources on those terms. Here's one that's current and provides examples: https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations On a margin account you avoid these issue because the margin (essentially a loan from your broker) provides a cushion / additional funds that avoid the issues. It is possible that if you over-extend yourself that you'll get a \"\"margin call,\"\" but that seems to be different than what you're asking and maybe worth a new question if you want to know about that.\"", "title": "" }, { "docid": "e604008e0fef242d90c196819044e530", "text": "Powers makes a good point: trading costs may eat up a significant portion of your ROI. A fee as little as 2% can consume more than 50% of your long-term ROI! A rule of thumb is keep your fees to less than 1%. One way to do that is to buy stock in companies that have a DRIP with a Share Purchase Plan (SPP). Often the SPP allows investors to purchase shares for low fees or free. Once you have the ability to purchase shares for (virtually) free, you can use InvestMete. Roughly, you send more money to the companies whose share prices are near their 52-week low, and less money to those who are near their 52-week high. Getting back to your original question...", "title": "" }, { "docid": "3f8322c9d7eca2e486c8147430074bb7", "text": "One implication is the added fees if you are investing in something with a trading cost or commission, such as your stock purchase. If you pay low costs to trade (e.g. with a discount broker) and don't switch your investments often, then costs overall should remain reasonable .. but always be aware of your costs and seek to minimize them.", "title": "" } ]	fiqa
babeedf19b0afd6885df0538c3f619c9	What are some tips for getting the upper hand in car price negotiations?	[ { "docid": "52e40fd08cb30cf52d054148af711b47", "text": "\"I read a really good tract that my credit union gave me years ago written by a former car salesman about negotiation tactics with car dealers. Wish I could find it again, but I remember a few of the main points. 1) Never negotiate based on the monthly payment amount. Car salesmen love to get you into thinking about the monthly loan payment and often start out by asking what you can afford for a payment. They know that they can essentially charge you whatever they want for the car and make the payments hit your budget by tweaking the loan terms (length, down payment, etc.) 2) (New cars only) Don't negotiate on the price directly. It is extremely hard to compare prices between dealerships because it is very hard to find exactly the same combination of options. Instead negotiate the markup amount over dealer invoice. 3) Negotiate one thing at a time A favorite shell game of car dealers is to get you to negotiate the car price, trade-in price, and financing all at one time. Unless you are a rain-man mathematical genius, don't do it. Doing this makes it easy for them to make concessions on one thing and take them right back somewhere else. (Minus $500 on the new car, plus $200 through an extra half point on financing, etc). 4) Handling the Trade-In 5) 99.9999% of the time the \"\"I forgot to mention\"\" extra items are a ripoff They make huge bonuses for selling this extremely overpriced junk you don't need. 6) Scrutinize everything on the sticker price I've seen car dealers have the balls to add a line item for \"\"Marketing Costs\"\" at around $500, then claim with a straight face that unlike OTHER dealers they are just being upfront about their expenses instead of hiding them in the price of the car. Pure bunk. If you negotiate based on an offset from the invoice instead of sticker price it helps you avoid all this nonsense since the manufacturer most assuredly did not include \"\"Marketing costs\"\" on the dealer invoice. 7) Call Around before closing the deal Car dealers can be a little cranky about this, but they often have an \"\"Internet sales person\"\" assigned to handle this type of deal. Once you know what you want, but before you buy, get the model number and all the codes for the options then call 2-3 dealers and try to get a quote over the phone or e-mail on that exact car. Again, get the quote in terms of markup from dealer invoice price, not sticker price. Going through the Internet sales guy doesn't at all mean you have to buy on the Internet, I still suggest going down to the dealership with the best price and test driving the car in person. The Internet guy is just a sales guy like all the rest of them and will be happy to meet with you and talk through the deal in-person. Update: After recently going through this process again and talking to a bunch of dealers, I have a few things to add: 7a) The price posted on the Internet is often the dealer's bottom line number. Because of sites like AutoTrader and other car marketplaces that let you shop the car across dealerships, they have a lot of incentive to put their rock-bottom prices online where they know people aggressively comparison shop. 7b) Get the price of the car using the stock number from multiple sources (Autotrader, dealer web site, eBay Motors, etc.) and find the lowest price advertised. Then either print or take a screenshot of that price. Dealers sometimes change their prices (up or down) between the time you see it online and when you get to the dealership. I just bought a car where the price went up $1,000 overnight. The sales guy brought up the website and tried to convince me that I was confused. I just pulled up the screenshot on my iPhone and he stopped arguing. I'm not certain, but I got the feeling that there is some kind of bait-switch law that says if you can prove they posted a price they have to honor it. In at least two dealerships they got very contrite and backed away slowly from their bargaining position when I offered proof that they had posted the car at a lower price. 8) The sales guy has ultimate authority on the deal and doesn't need approval Inevitably they will leave the room to \"\"run the deal by my boss/financing guy/mom\"\" This is just a game and negotiating trick to serve two purposes: - To keep you in the dealership longer not shopping at competitors. - So they can good-cop/bad-cop you in the negotiations on price. That is, insult your offer without making you upset at the guy in front of you. - To make it harder for you to walk out of the negotiation and compromise more readily. Let me clarify that last point. They are using a psychological sales trick to make you feel like an ass for wasting the guy's time if you walk out on the deal after sitting in his office all afternoon, especially since he gave you free coffee and sodas. Also, if you have personally invested a lot of time in the deal so far, it makes you feel like you wasted your own time if you don't cross the goal line. As soon as one side of a negotiation forfeits the option to walk away from the deal, the power shifts significantly to the other side. Bottom line: Don't feel guilty about walking out if you can't get the deal you want. Remember, the sales guy is the one that dragged this thing out by playing hide-and-seek with you all day. He wasted your time, not the reverse.\"", "title": "" }, { "docid": "6d5910124726284e0e65d9ed7ffacf81", "text": "\"I love John's answer, but I just can't help myself from adding my 2 cents, even though it's over 5 years later. I sold cars for a while in the late 90s, and I mostly agree with John's answer. Where I disagree though, is that where I worked, the salesperson did not have ANY authority to make a sale. A sales manager was required to sign off on every sale. That doesn't mean that the manager had to interact with the buyer, that could all be handled behind the scenes, but the pricing and even much of the negotiating strategies were dictated by the sales managers. Some of the seasoned salespeople would estimate numbers on their own, but occasionally you'd hear the managers still chew them out with \"\"I wish you wouldn't have said that\"\". Of course, every dealership is different. Additional purchase advice: There is a strategy that can work well for the buyer, but only in scenarios where the salesperson is trying to prevent you from leaving. They may start interrupting you as you are packing up, or blocking your path to the door, or even begging. If this happens, they are obviously desperate for whatever reason. In this case, if you came prepared with research on a good price that you are comfortable with, then shoot lower and hold firm to the point of near exhaustion. Not so low that that they realize you're too far away- they will let you leave at that point. It needs to be within a reasonable amount, perhaps at most 1-2% of the purchase price. Once you detect the salesperson is desperate, you finally move up to your goal number or possibly a little lower. Typically the salesperson will be so happy to have gotten you to move at all that they'll accept. And if the managers are fed up too (like 45 minutes after close), they'll accept too. I saw this happen multiple times in a high pressure scenario. I also used it once myself as a buyer. If you are planning to purchase options that can be added at the dealer rather than from the factory, keep them up your sleeve at first. Get your negotiations down to where you are a little further apart than the invoice price of the option, then make your move. For example, suppose the option you want retails for $350 with an invoice of $300. Get within about $400 of the dealer. Then offer to pay their price, but only if they throw in the option you want. This will throw them completely off guard because they didn't expect it and all of their calculations were based on without it. If they say yes, you effectively moved $100 and they moved $300. It's much more likely that they'll agree to this than taking $300 off the price of the car. (I'm guessing the reason for this is partially due to how their accounting works with sticker price vs aftermarket price, and partially psychological.) Note, this works best with new cars, and make sure you only do this if it's for items they can add after the fact. Even if they don't have the part in stock it's ok, they can give you an IOU. But if the option requires a car change to something they don't have on the lot, it will probably just make them mad.\"", "title": "" }, { "docid": "c7577a8c25ed9cc6e1deef21bd12ed1a", "text": "One point I don't see above: Consumer's Union (the nonprofit which publishes Consumer Reports) has a service where, for a small fee, they'll send you information about how much the car and each option cost the dealer, how much the dealer is getting back in incentive money from the manufacturer, and some advice about which features are worthwhile, which aren't, and which you should purchase somewhere other than the dealer. Armed with that info, you can discuss the price on an equal footing, negotiating the dealer's necessary profit rather than hiding it behind bogus pricing schemes. Last time I bought a new car, I got this data, walked into the dealer with it visible on my clipboard, offered them $500 over their cost, and basically had the purchase nailed down immediately. It helped that I as willing to accept last year's model and a non-preferred color; that helped him clear inventory and encouraged him to accept the offer. ($500 for 10 minutes' work selling to me, or more after an hour of playing games with someone else plus waiting for that person to walk in the door -- a good salesman will recognize that I'm offering them a good deal. These days I might need to adjust that fair-profit number up a bit; this was about 20 years ago on an $8000 car... but I'm sure CU's paperwork suggests a current starting number.) It isn't quite shelf pricing. But at least it means any haggling is based on near-equal knowledge, so it's much closer to being a fair game.", "title": "" }, { "docid": "34e832e1a799ca7ec15ddc54e6c37cef", "text": "\"JohnFX and TTT provide excellent answers. Researching prices others have paid, being up front that you'll go buy a junker car to hold you over if they won't meet your price, and playing a few dealerships off of each other are all great tactics. In addition, I've got a few points about timing your purchase. If you're not desperate for a car, these can really help give you the upper hand in negotiations: Wait until the end of the month. Dealerships and individual salespeople usually have quotas that they're trying to clear, and the month is usually the standard cutoff. The last time I bought a car, the salesman made the mistake of mentioning, \"\"I don't usually work Thursdays, but I'll be in this Thursday.\"\" Thursday was the 31st - I inferred from this information that he hadn't made his quota for the month yet. So I came back on the 31st to negotiate, and managed to hammer out a pretty good deal. Wait until about an hour before the dealership closes to show up and shop. This gives you enough time to not be obvious about the tactic, but you'll definitely be holding them past their normal quitting time if you do much negotiating. The salesman will be a little more inclined to make a deal so he can get home and have dinner. Bonus points if you can wait until a month that ends on a Friday!\"", "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": "acb6347e5d3d910611bd8d83452fe9dc", "text": "\"He sounds like a very bad salesman and I should know, because I was a sales manager at a bike shop which sold bikes from $200 to $10k. Now I had a clear goal, which is to sell as many bikes at the highest price possible, but I didn't do that by making customers uncomfortable. Each customer received different treatment depending on what they were looking for. For example, the $200 beach cruiser buyer was going to be told \"\"You look great on that bike... can I ring you up?\"\", whereas the racer interested in saving grams will receive a detailed discussion about his bike options. The $200 bike customer won't have very sophisticated questions (although I could give a lecture on cruisers), so giving out too much info complicates a likely quick impulse buy. On the other hand, we are building a relationship with the racer which will include detailed fitting sessions and time-consuming mechanical service. While I also want to close a high priced sale, it will take several visits to prove both I have the right bike and this is the best shop. But no matter what you were buying, I was always pleasant and unhurried, and my customers left happy. Specifically with this situation of high pressure tactics, the problem is the competition with internet sales. Often customers will have only 2 criteria, the model and the price, and if a shop does not meet both, the customer walks right out. Possibly this sales guy is a bit cynical with his tactics, but the reality is that if you have no relationship with that shop, you fall into the category of internet buyer. One thing the sales guy could have done was not tell you we wasn't going to honor this price if you came back. Occasionally there would be an internet buyer, and I showed no unpleasantness even though internet sellers could crush our brick and mortar shop. I would mention a competitive price and if he bought it, great, and if not, that's just business. As for the buyer, I would treat these tactics with a certain detachment. I would personally chuckle at his treatment and ask if I could kick the tires, an user car saying. I suppose the bottom line is if you are ready to buy this specific model, and if the price is right (and the shop is ethical so you won't get ripped off with garbage), then you have to be ready to buy on the spot. I will point out one horrible experience I had at a car dealership. I came in 15 minutes before closing and a sales person gave me a price almost a third cheaper than list. I wasn't ready to buy on my first visit ever to a dealership and of course, buying a car has all kinds of hidden fees. I asked will this be the price tomorrow, and he said absolutely not. I told him, \"\"so if I come in tomorrow morning, your dealer clock has only gone 15 minutes\"\" but that logic did not register with him. Maybe he thought I was going to spend 15k on the spot and pressure tactics would work on me. I never came back, but I did go another dealership and bought a car after a reasonable negotiation.\"", "title": "" }, { "docid": "37049d5b4651ff2d2b07af518e8d9f81", "text": "You already got good answers on why you can't buy a Toyota from the factory, but my answer is regarding to the implied second part of your question: how to avoid haggling. I found a good way to avoid the haggling at a car dealership can be simply to not haggle. Go in with a different attitude. The main reason car dealers list inflated prices and then haggle is that they expect the customers to haggle. It is fundamentally based on distrust on both sides. Treat the sales person as your advisor, your business partner, as somebody you trust as an expert in his field, and you'll be surprised how the experience changes. Of course, make sure that the trust is justified. Sales reps have a fine line to walk. Of course they like to sell a car for more money, but they also do not want a reputation of overcharging customers. They'd rather you recommend them to your friends and post good reviews on Yelp. In the end, all reputable dealers effectively have a fixed-price policy, or close to it, even those who don't advertise it, and even for used cars. Haggling just prolongs the process to get there. And sales reps are people. Often people who hate the haggling part of their job as much as you do. I was in the market for a new (used) car a few months ago. In the end, it was between two cars (one of them a Toyota), both from the brand-name dealer's respective used car lots. In both cases, I went in knowing in advance what the car's fair market value was and what I was willing to pay (as well as details about the car, mileage, condition etc. - thanks to the Internet). Both cars were marked significantly higher. As soon as the sales rep realized that I wasn't even trying to haggle - the price dropped to the fair value. I didn't even have to ask for it. The rep even offered some extras thrown into the deal, things I hadn't even asked for (things like towing my old car to the junk yard).", "title": "" }, { "docid": "2bb4e06785887fbf93def08101666f95", "text": "\"For the future: NEVER buy a car based on the payment. When dealers start negotiating, they always try to have you focus on the monthly payment. This allows them to change the numbers for your trade, the price they are selling the car for, etc so that they maximize the amount of money they can get. To combat this you need to educate yourself on how much total money you are willing to spend for the vehicle, then, if you need financing, figure out what that actually works out to on a monthly basis. NEVER take out a 6 year loan. Especially on a used car. If you can't afford a used car with at most a 3 year note (paying cash is much better) then you can't really afford that car. The longer the note term, the more money you are throwing away in interest. You could have simply bought a much cheaper car, drove it for a couple years, then paid CASH for a new(er) one with the money you saved. Now, as to the amount you are \"\"upside down\"\" and that you are looking at new cars. $1400 isn't really that bad. (note: Yes you were taken to the cleaners.) Someone mentioned that banks will sometimes loan up to 20% above MSRP. This is true depending on your credit, but it's a very bad idea because you are purposely putting yourself in the exact same position (worse actually). However, you shouldn't need to worry about that. It is trivial to negotiate such that you pay less than sticker for a new car while trading yours in, even with that deficit. Markup on vehicles is pretty insane. When I sold, it was usually around 20% for foreign and up to 30% for domestic: that leaves a lot of wiggle room. When buying a used car, most dealers ask for at least $3k more than what they bought them for... Sometimes much more than that depending on blue book (loan) value or what they managed to talk the previous owner out of. Either way, a purchase can swallow that $1400 without making it worse. Buy accordingly.\"", "title": "" }, { "docid": "2a44e8cbf7e4a965cdc2a692b9e07023", "text": "\"As others have said, if the dealer accepted payment and signed over ownership of the vehicle, that's a completed transaction. While there may or may not be a \"\"cooling-off period\"\" in your local laws, those protect the purchaser, not (as far as I know) the seller. The auto dealer could have avoided this by selling for a fixed price. Instead, they chose to negotiate every sale. Having done so, it's entirely their responsibility to check that they are happy with their final agreement. Failing to do so is going to cost someone their commission on the sale, but that's not the buyer's responsibility. They certainly wouldn't let you off the hook if the final price was higher than you had previously agreed to. He who lives by the fine print shall die by the fine print. This is one of the reasons there is huge turnover in auto sales staff; few of them are really good at the job. If you want to be kind to the guy you could give him the chance to sell you something else. Or perhaps even offer him a $100 tip. But assuming the description is correct, and assuming local law doesn't say otherwise (if in any doubt, ask a lawyer!!!), I don't think you have any remaining obligation toward them On the other hand, depending on how they react to this statement, you might want to avoid their service department, just in case someone is unreasonably stupid and tries to make up the difference that was.\"", "title": "" }, { "docid": "504089feb4bd30384b327605e231255a", "text": "First step is determine how much equity is in the car (positive or negative). Then for your car payments has that been paid out of money that has already been split or is it from a pool that is still to be slit. If the later, then it is irrelevant to this discussion since it was from a joint pool. If the money has already been split then adjust her half of the equity in the car by what you have been paying an make her that offer for her half of the car. I recommend showing her the calculations so as to explain how you came with what she is owed and then let her make a counter offer.", "title": "" }, { "docid": "945d9dd753ff1d61c83f1f76913805a1", "text": "The best thing to do is pay off the car. Adding more variables to a negotiation with a car dealer (in this case, a trade in), is always going to go in their favor. This is why people recommend negotiating a price down first, before ever mentioning to the dealer you want to do a trade in or financing.", "title": "" }, { "docid": "ca02d79a218a5da56b3ad28ddecc2d10", "text": "\"I have a very simple rule. For anything other than trivial purchases (a small fraction of my monthly income), the only final decision I will make in the presence of a salesperson is \"\"No\"\". After I have the terms nailed down, and still feel that I am likely to buy the item, I leave the store, car dealership etc., and think about it by myself. Often, I go to a mall coffee shop to do the thinking. If it is really big, I sleep on it and make my decision the next day. Once I have made my decision, I inform the salesperson. If the decision is \"\"No\"\" I do not discuss my reasons - that gives them an overcome-the-objection lever. I just tell them I have decided not to buy the item, which is all they need to know.\"", "title": "" }, { "docid": "438bad75d87d85c9b5fcb2144e7da298", "text": "Ideally you would negotiate a car price without ever mentioning: And other factors that affect the price. You and the dealer would then negotiate a true price for the car, followed by the application of rebates, followed by negotiating for the loan if there is to be one. In practice this rarely happens. The sales rep asks point blank what rebates you qualify for (by asking get-to-know-you questions like where you work or if you served in the armed forces - you may not realize that these are do-you-qualify-for-a-rebate questions) before you've even chosen a model. They take that into account right from the beginning, along with whether they'll make a profit lending you money, or have to spend something to subsidize your zero percent loan. However unlike your veteran's status, your loan intentions are changeable. So when you get to the end you can ask if the price could be improved by paying cash. Or you could try putting the negotiated price on a credit card, and when they don't like that, ask for a further discount to stop you from using the credit card and paying cash.", "title": "" }, { "docid": "de1822f204fe741200c71c1426fb9d90", "text": "I used to do the opposite when I needed to rent a car locally. I would request the bottom of the line and tell them that I will pick up at one of our expensive resorts. They never had any Kia Sorentos, but they had nice Lincolns and other high end vehicles for Kia prices. I'm sorry, we don't have the Ford Escort you reserved, so I'll give you a Towncar for the Escort price.", "title": "" }, { "docid": "1998aad62501d90096f94e435b798ef6", "text": "The advice given at this site is to get approved for a loan from your bank or credit union before visiting the dealer. That way you have one data point in hand. You know that your bank will loan w dollars at x rate for y months with a monthly payment of Z. You know what level you have to negotiate to in order to get a better deal from the dealer. The dealership you have visited has said Excludes tax, tag, registration and dealer fees. Must finance through Southeast Toyota Finance with approved credit. The first part is true. Most ads you will see exclude tax, tag, registration. Those amounts are set by the state or local government, and will be added by all dealers after the final price has been negotiated. They will be exactly the same if you make a deal with the dealer across the street. The phrase Must finance through company x is done because they want to make sure the interest and fees for the deal stay in the family. My fear is that the loan will also not be a great deal. They may have a higher rate, or longer term, or hit you with many fee and penalties if you want to pay it off early. Many dealers want to nudge you into financing with them, but the unwillingness to negotiate on price may mean that there is a short term pressure on the dealership to do more deals through Toyota finance. Of course the risk for them is that potential buyers just take their business a few miles down the road to somebody else. If they won't budge from the cash price, you probably want to pick another dealer. If the spread between the two was smaller, it is possible that the loan from your bank at the cash price might still save more money compared to the dealer loan at their quoted price. We can't tell exactly because we don't know the interest rates of the two offers. A couple of notes regarding other dealers. If you are willing to drive a little farther when buying the vehicle, you can still go to the closer dealer for warranty work. If you don't need a new car, you can sometimes find a deal on a car that is only a year or two old at a dealership that sells other types of cars. They got the used car as a trade-in.", "title": "" }, { "docid": "51efadd821f1bda70945d48d468a2950", "text": "I don't buy new cars anymore, but I've helped family members negotiate prices on new cars recently. There are various online services to see the average price paid, as well as the low outliers. I've looked at truecar.com for instance to see what others have paid within 50 miles of my zip-code. I think the only way for you to know you're being offered a good deal is to see if any of the other dealers that have not responded are willing to talk when you offer them $22,300 which the dealer above suggested was break-even point. If none of them respond, then you know you're really at the bottom of the negotiating window. If one of them does respond, then you can go back to that internet sales manager and ask why another dealership (do not disclose which one) is willing to sell it to you for less than $22,400 (do not disclose how much lower they offered to sell it for). In my experience, most dealers will sell at or just below the break-even price at the end of the quarter so that they can beat other dealerships out for the quota. That gives you a week and a half to find the bottom price before going in on New Years Eve to seal the deal.", "title": "" }, { "docid": "168704f710afdf153cf1d910d90c06eb", "text": "\"You can greatly reduce the risk if you can line up a buyer prior to purchasing the car. That kind of thing is common in business, one example is drop shipping. Also there are sales companies that specialize in these kinds of things bringing manufacturers of goods together with customers. The sales companies never take delivery of the product, just a commission on the sales. From this the manufacturers are served as they have gained a customer for their goods. The buying company is served as they can make a \"\"better\"\" end product. The two parties may have not been brought together had it not been for the sales company so on some level both are happy to pay for the service. Can you find market inequalities and profit from them? Sure. I missed a great opportunity recently. I purchased a name brand shirt from a discount store for $20. Those shirts typically sell on ebay for $80. I should have cleaned out that store's inventory, and I bet someone else did as by the time I went back they were gone. That kind of thing was almost risk-less because if the shirts did not sell, I could simply return them for the full purchase price. That and I can afford to buy a few hundred dollars worth of shirts. Can you afford to float 45K CDN? What if it takes a year to sell the car? What if the economy goes sour and you are left \"\"holding the bag\"\"? Why are not car dealers doing exactly what you propose? Here in the US this type of thing is called \"\"horse trading\"\" and is very common. I've both lost and made money on these kind of deals. I would never put a significant amount of my net worth at risk.\"", "title": "" }, { "docid": "d3131fea694d5ac842c532e951554e55", "text": "\"I'm sorry to hear you've made a mistake. Having read the contract of sale we signed, I do not see any remedy to your current situation. However, I'm interested in making sure I do not take advantage of you. As such, I'll return the vehicle, you can return my money plus the bank fees I paid for the cashiers check, tax, title, and registration, and I will look at buying a vehicle from another dealership. This seems to be the most fair resolution. If I were to pay for your mistake at a price I did not agree to, it would not be fair to me. If you were to allow this vehicle to go to me at the price we agreed to, it wouldn't be fair to you. If I were to return the car and begin negotiations again, or find a different car in your lot, it would be difficult for us to know that you were not going to make a similar mistake again. At this point I consider the sale final, but if you'd prefer to have the vehicle back as-is, returning to us the money we gave you as well as the additional costs incurred by the sale, then we will do so in order to set things right. Chances are good you will see them back down. Perhaps they will just cut the additional payment in half, and say, \"\"Well, it's our mistake, so we will eat half the cost,\"\" or similar, but this is merely another way to get you to pay more money. Stand firm. \"\"I appreciate the thought, but I cannot accept that offer. When will you have payment ready so we can return the car?\"\" If you are firm that the only two solutions is to keep the car, or return it for a full refund plus associated costs, I'd guess they'd rather you keep the car - trust me, they still made a profit - but if they decide to have it returned, do so and make sure they pay you in full plus other costs. Bring all your receipts, etc and don't hand over the keys until you have the check in hand. Then go, gladly, to another dealership that doesn't abuse its customers so badly. If you do end up keeping the car, don't plan on going back to that dealership. Use another dealership for warranty work, and find a good mechanic for non-warranty work. Note that this solution isn't legally required in most jurisdictions. Read your contract and all documentation they provided at the time of sale to be sure, but it's unlikely that you are legally required to make another payment for a vehicle after the sale is finalized. Even if they haven't cashed the check, the sale has already been finalized. What this solution does, though, is put you back in the driver's seat in negotiating. Right now they are treating it as though you owe them something, and thus you might feel an obligation toward them. Re-asserting your relationship with them as a customer rather than a debtor is very important regardless of how you proceed. You aren't legally culpable, and so making sure they understand you aren't will ultimately help you. Further, dealerships operate on negotiation. The primary power the customer has in the dealership is the power to walk away from a deal. They've set the situation up as though you no longer have the power to walk away. They didn't threaten with re-possession because they can't - the sale is final. They presented as a one-path situation - you pay. Period. You do have many options, though, and they are very familiar with the \"\"walk away\"\" option. Present that as your chosen option - either they stick with the original deal, or you walk away - and they will have to look at getting another car off the lot (which is often more important than making a profit for a dealership) or selling a slightly used car. If they've correctly pushed the title transfer through (or you, if that's your task in your state) then your brief ownership will show up on carfax and similar reports, and instantly reduces the car's worth. Having the title transfer immediately back to the dealership doesn't look good to future buyers. So the dealership doesn't want the car back. They are just trying to extract more money, and probably illegally, depending on the laws in your jurisdiction. Reassert your position as customer, and decide now that you'll be fine if you have to return it and walk away. Then when you communicate that to them, chances are good they'll simply cave and let the sale stand as-is.\"", "title": "" }, { "docid": "101bd8af9cec549d6f124020231f8ebe", "text": "\"These sort of issues in structuring your personal finances relative to expenses can get complicated quickly, as your example demonstrates. I would recommend a solution that reduces duplication as much as possible- and depending on what information you're interested in tracking you could set it up in very different ways. One solution would be to create virtual sub accounts of your assets, and to record the source of money rather than the destination. Thus, when you do an expense report, you can limit on the \"\"his\"\" or \"\"hers\"\" asset accounts, and see only the expenses which pertain to those accounts (likewise for liabilities/credit cards). If, on the other hand, you're more interested in a running sum of expenses- rather than create \"\"Me\"\" and \"\"Spouse\"\" accounts at every leaf of the expense tree, it would make much more sense to create top level accounts for Expenses:His:etc and Expenses:Hers:etc. Using this model, you could create only the sub expense accounts that apply for each of your spending (with matching account structures for common accounts).\"", "title": "" } ]	fiqa
816f9b63e7bcdcbb582461a10905e7bf	I bought a new car for a month and wanted to return it	[ { "docid": "538680ffbeda237b411a08ebf7cd17fd", "text": "My assumption here is that you paid nearly 32K, but also financed about 2500 in taxes/fees. At 13.5% the numbers come out pretty close. Close enough for discussion. On the positive side, you see the foolishness of your decision however you probably signed a paper that stated the true cost of the car loan. The truth in lending documents clearly state, in bold numbers, that you would pay nearly 15K in interest. If you pay the loan back early, or make larger principle payments that number can be greatly reduced. On top of the interest charge you will also suffer depreciation of the car. If someone offered you 31K for the car, you be pretty lucky to get it. If you keep it for 4 years you will probably lose about 40% of the value, about 13K. This is why it is foolish for most people to purchase a new vehicle. Not many have enough wealth to absorb a loss of this size. In the book A Millionaire Next Door the author debunks the assumption that most millionaires drive new cars. They tend to drive cars that are pretty standard and a couple of years old. They pay cash for their cars. The bottom line is you singed documents indicating that you knew exactly what you were getting into. Failing any other circumstances the car is yours. Talking to a lawyer would probably confirm this. You can attempt to sell it and minimize your losses, or you can pay off the loan early so you are not suffering from finance charges.", "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": "7665543f728d53114d0388a6ea8c214e", "text": "Dealerships make a lot of money in the finance department. One of the thing they play upon is your emotional reaction of purchasing a new vehicle (new to you in this case). They perform all sorts of shenanigans, like adding undercoat, selling gap insurance, or extended warranties. They entice you with a promise of a lower interest rate, but really what they are trying to do is back you into a payment. So if you can fiance 20,000, but the car you are buying is 16,000, then they will try to move that figure up to the 20K mark. In your case it sounded like some borderline (at the least) illegal activity they used to fool you into paying more. It sounds like you regret this decision which puts you a step ahead of most. How many people brag about the extended warranty or gap insurance they got included in the sale? As mentioned in another answer the best bet is to go into the dealership with financing in place. Say you were able to get a 3% loan on 16K. The total interest would be ~1600. If you avoid the finance room, you might avoid their dubious add ons that would probably cost you more then the 1600 even if you can get 0%. If you are going to buy a car on time, my advice would be to not fill out a credit app at the dealership. The dealership people through a conniption fit, but hold your ground. If need be get up and walk out. They won't let you leave. One thing I must mention, is that one feels very wealthy without that monthly pain in the a$$ payment for a car. You may want to try and envision yourself without a car payment, and make steps to making that a reality for the rest of your life.", "title": "" }, { "docid": "4f9f5b030ba22a07c5635bb76abf7cda", "text": "The dealership is getting a kickback for having you use a particular bank to finance through. The bank assumes you will take the full term of the loan to pay back, and will hopefully be a repeat customer. This tactic isn't new, and although it maybe doesn't make sense to you, the consumer, in the long run it benefits the bank and the dealership. (They wouldn't do it otherwise. These guys have a lot of smart people running #s for them). Be sure to read the specifics of the loan contract. There may be a penalty for paying it off early. Most customers won't be able to pay that much in cash, so the bank makes a deal with the dealership to send clients their way. They will lose money on a small percentage of clients, but make more off of the rest of the clients. If there's no penalty for paying it off early, you may just want to take the financing offer and pay it off ASAP. If you truly can only finance $2500 for 6 mos, and get the full discount, then that might work as well. The bank had to set a minimum for the dealership in order to qualify as a loan that earns the discount. Sounds like that's it. Bonus Info: Here's a screenshot of Kelley Blue Book for that car. Car dealers get me riled up, always have, always will, so I like doing this kind of research for people to make sure they get the right price. Fair price range is $27,578 - $28,551. First time car buyers are a dealers dream come true. Don't let them beat you down! And here's more specific data about the Florida area relating to recent purchases:", "title": "" }, { "docid": "83f722d2f398117aafd522e4bfb3384e", "text": "I think you are making this more complicated that it has to be. In the end you will end up with a car that you paid X, and is worth Y. Your numbers are a bit hard to follow. Hopefully I got this right. I am no accountant, this is how I would figure the deal: The payments made are irrelevant. The downpayment is irrelevant as it is still a reduction in net worth. Your current car has a asset value of <29,500>. That should make anyone pause a bit. In order to get into this new car you will have to finance the shortfall on the current car (29,500), the price of the vehicle (45,300), the immediate depreciation (say 7,000). In the end you will have a car worth 38K and owe 82K. So you will have a asset value of <44,000>. Obviously a much worse situation. To do this car deal it would cost the person 14,500 of net worth the day the deal was done. As time marched on, it would be more as the reduction in debt is unlikely to keep up with the depreciation. Additionally the new car purchase screen shows a payment of $609/month if you bought the car with zero down. Except you don't have zero down, you have -29,500 down. Making the car payment higher, I estamate 1005/month with 3.5%@84 months. So rather than having a hit to your cash flow of $567 for 69 more months, you would have a payment of about $1000 for 84 months if you could obtain the interest rate of 3.5%. Those are the two things I would focus on is the reduction in net worth and the cash flow liability. I understand you are trying to get a feel for things, but there are two things that make this very unrealistic. The first is financing. It is unlikely that financing could be obtained with this deal and if it could this would be considered a sub-prime loan. However, perhaps a relative could finance the deal. Secondly, there is no way even a moderately financially responsible spouse would approve this deal. That is provided there were not sigificant assets, like a few million. If that is the case why not just write a check?", "title": "" }, { "docid": "e2f4400348bb1a1d6a1cb9b5ac1b47e0", "text": "\"The \"\"guaranteed minimum future value\"\" isn't really a guarantee so much as the amount they will charge you at the end of the agreement if you want to keep the car. In this sense it might better be considered a \"\"guaranteed maximum future cost\"\". If the car has fallen below that value at that point, then you can just hand back the car and you won't owe anything extra. If it turns out to be worth more, you end up in profit - though only if you either actually pay for the car, or if you roll over into a new PCP deal. So the finance company has an incentive to set it at a sensible value, otherwise they'll end up losing money. Most new cars lose a lot of value quickly initially, and then the rate of loss slows down. But given that it's lost £14k in 2 years, it seems pretty likely it'll lose much more than another £1k in the next 2 years. So it does sound like that in this case, they estimated the value badly at the start of the deal and will end up taking a loss on the deal when you hand it back at the end. It appears you also have the legal right to \"\"voluntary termination\"\" once you have paid off half the \"\"Total Amount Payable\"\". This should be documented in the PCP agreement and if you're half way into the deal then I'd expect you'll be about there. If that doesn't apply, you can try to negotiate to get out of the deal early anyway. If they look at it rationally, they should think about the value of your payments over the next two years minus the loss they will end up with at the end of those two years. But there's no guarantee they will. Disclaimer: Despite living in the UK, I hadn't heard of these contracts until I read this question, so my answer is based entirely on web searches and some inferences. The two most useful sources I found on the general subject were this one and this one.\"", "title": "" }, { "docid": "f195506e5ad64e7c9534b745b99e9442", "text": "You cannot do a like-kind (Sec. 1031) exchange for personal property, only for business/investment property. Since you said that you traded in your personal car - no like-kind exchange is possible. Also, since the new car doesn't belong to you - you didn't actually perform any exchange. You sold your old car, but you didn't buy a new one. If Turbo-Tax suggests you to fill the exchange form - you must have entered something wrong to make it think there was an exchange. Check your entries again, specifically - check if you entered that you purchased a new car instead of the old one, since you didn't. See an example of where to start looking here.", "title": "" }, { "docid": "2bcff75efa64863edad934ea3a368296", "text": "\"You say \"\"it's expensive\"\". I'm going to interpret this as \"\"the monthly payments are too high\"\". Basically, you need to get your old loan paid off, presumably by selling the car you have now. This is the tough part. If you sold the car now, how much would you get for it? You can use Kelley Blue Book to figure out what the car is roughly worth. That's not a guarantee that it will actually sell for that much. Look in your local classifieds to see what similar cars are selling for. (Keep in mind that you will usually get less for your old car if you trade it in versus sell it yourself.) Now, if you owe more than your car is worth, you're in a really tight spot. If you don't get enough money when you sell it, you are still stuck with the remainder of the loan. In that case, it is usually best to just stick with the car you have, and be more cautious about payments and loan length the next time you finance a car. Penalties: Most car loans don't have any kind of early repayment penalty. However, you should check your loan paperwork just to make sure.\"", "title": "" }, { "docid": "8498e88cc71c1bc5daaee26a39da5f90", "text": "Good news: the car is so heavily reserved you won't be able to buy it for 2 or 3 years. The Beta should be over then. And did the X get terrible reviews by Consumer reports? Yes. Is it because of crazy shit like it's Gull Wing doors? Does the M3 have that? Not at all.", "title": "" }, { "docid": "13f8f990eb2701f4c3ca892e40f200d7", "text": "A loan that does not begin with at least a 20% deposit and run through a term of no longer than 48 months is the world's way of telling you that you can't afford this vehicle. Consumer-driven cars are rapidly depreciating assets. Attenuating the loan to 70 months or longer means that payments will not keep up with normal depreciation, thus trapping the buyer in an upside down loan for the entire term.", "title": "" }, { "docid": "f78e13b5fa08fd74fc0c5257c84d2820", "text": "\"Evaluating the total cost of operation and warranty period are indeed important considerations, but the article is specifically about buyers making an expensive car \"\"feel\"\" more affordable to their budget by having smaller payments over a longer term. >“Stretching out loan terms to secure a monthly payment they’re comfortable with is becoming buyers’ go-to way to get the cars they want, equipped the way they want them,” said Jessica Caldwell, Edmunds executive director of industry analysis.\"", "title": "" }, { "docid": "d2e39b40e4732a73b9ab6c2fd60624b1", "text": "Unusual. Most dealers pay interest on their inventory, so they don't like having so much around so long. But they dislike taking a loss on a car, so if the market is weak for a few months, they may choose to wait for an upturn rather than cut prices enough to move the cars.", "title": "" }, { "docid": "3e6d01e0013c0462160dddf726125ad0", "text": "If you had an agreement with your friend such that you could bring back a substantially similar car, you could sell the car and return a different one to him. The nature of shares of stock is that, within the specified class, they are the same. It's a fungible commodity like one pound of sand or a dollar bill. The owner doesn't care which share is returned as long as a share is returned. I'm sure there's a paragraph in your brokerage account terms of service eluding to the possibility of your shares being included in short sale transactions.", "title": "" }, { "docid": "7d981886fcd3d12405655510fc4a88ff", "text": "There are many reasons for buying new versus used vehicles. Price is not the only factor. This is an individual decision. Although interesting to examine from a macro perspective, each vehicle purchase is made by an individual, weighing many factors that vary in importance by that individual, based upon their specific needs and values. I have purchased both new and used cars, and I have weighted each of these factors as part of each decision (and the relative weightings have varied based upon my individual situation). Read Freakonomics to gain a better understanding of the reasons why you cannot find a good used car. The summary is the imbalance of knowledge between the buyer and seller, and the lack of trust. Although much of economics assumes perfect market information, margin (profit) comes from uncertainty, or an imbalance of knowledge. Buying a used car requires a certain amount of faith in people, and you cannot always trust the trading partner to be honest. Price - The price, or more precisely, the value proposition of the vehicle is a large concern for many of us (larger than we might prefer that it be). Selection - A buyer has the largest selection of vehicles when they shop for a new vehicle. Finding the color, features, and upgrades that you want on your vehicle can be much harder, even impossible, for the used buyer. And once you have found the exact vehicle you want, now you have to determine whether the vehicle has problems, and can be purchased at your price. Preference - A buyer may simply prefer to have a vehicle that looks new, smells new, is clean, and does not have all the imperfections that even a gently used vehicle would exhibit. This may include issues of pride, image, and status, where the buyer may have strong emotional or psychological needs to statisfy through ownership of a particular vehicle with particular features. Reviews - New vehicles have mountains of information available to buyers, who can read about safety and reliability ratings, learn about problems from the trade press, and even price shop and compare between brands and models. Contrasted with the minimal information available to used vehicle shoppers. Unbalanced Knowledge - The seller of a used car has much greater knowledge of the vehicle, and thus much greater power in the negotiation process. Buying a used car is going to cost you more money than the value of the car, unless the seller has poor knowledge of the market. And since many used cars are sold by dealers (who have often taken advantage of the less knowledgeable sellers in their transaction), you are unlikely to purchase the vehicle at a good price. Fear/Risk - Many people want transportation, and buying a used car comes with risk. And that risk includes both the direct cost of repairs, and the inconvenience of both the repair and the loss of work that accompanies problems. Knowing that the car has not been abused, that there are no hidden or lurking problems waiting to leave you stranded is valuable. Placing a price on the risk of a used car is hard, especially for those who only want a reliable vehicle to drive. Placing an estimate on the risk cost of a used car is one area where the seller has a distinct advantage. Warranties - New vehicles come with substantial warranties, and this is another aspect of the Fear/Risk point above. A new vehicle does not have unknown risk associated with the purchase, and also comes with peace of mind through a manufacturer warranty. You can purchase a used car warranty, but they are expensive, and often come with (different) problems. Finance Terms - A buyer can purchase a new vehicle with lower financing rate than a used vehicle. And you get nothing of value from the additional finance charges, so the difference between a new and used car also includes higher finance costs. Own versus Rent - You are assuming that people actually want to 'own' their cars. And I would suggest that people want to 'own' their car until it begins to present problems (repair and maintenance issues), and then they want a new vehicle to replace it. But renting or leasing a vehicle is an even more expensive, and less flexible means to obtain transportation. Expense Allocation - A vehicle is an expense. As the owner of a vehicle, you are willing to pay for that expense, to fill your need for transportation. Paying for the product as you use the product makes sense, and financing is one way to align the payment with the consumption of the product, and to pay for the expense of the vehicle as you enjoy the benefit of the vehicle. Capital Allocation - A buyer may need a vehicle (either to commute to work, school, doctor, or for work or business), but either lack the capital or be unwilling to commit the capital to the vehicle purchase. Vehicle financing is one area banks have been willing to lend, so buying a new vehicle may free capital to use to pay down other debts (credit cards, loans). The buyer may not have savings, but be able to obtain financing to solve that need. Remember, people need transportation. And they are willing to pay to fill their need. But they also have varying needs for all of the above factors, and each of those factors may offer value to different individuals.", "title": "" }, { "docid": "5b5a8ab3129653aeba03d641f4caf4ed", "text": "The article made it seem like a lot of these were frivolous purchases, but I doubt there's any clear data on the percent that were someone's primary vehicle, etc. Usually if you default on a new-car loan you can still get a high-interest loan for a used car that will still be a lot less than your old payment.", "title": "" }, { "docid": "d548dfab650da351f25dd51212badb2e", "text": "Sounds like 'up-selling'. You can harden yourself into being a 'tough sell' but it takes time and a lot of shopping. The quickest way to put up a defense is to never ever make a purchase over $100 without 'sleeping on it'. Just walk away, tell them you'll think it over, and go do some more research. Don't go back into a dealership or store that has hit you with guilt or pressure or a crazy price or whatever. Find a no-haggle or no-frills source, or even a source to buy a used version of the item you want.", "title": "" }, { "docid": "4b7cd157197402aa1a8b2a3dc933137c", "text": "\"This question and your other one indicate you're a bit unclear on how capital gains taxes work, so here's the deal: you buy an asset (like shares of stock or a mutual fund). You later sell it for more than you bought it for. You pay taxes on your profit: the difference between what you sold it for and what you bought it for. What matters is not the amount of money you \"\"withdraw\"\", but the prices at which assets are bought and sold. In fact, often you will be able to choose which individual shares you sell, which means you have some control over the tax you pay. For a simple example, suppose you buy 10 shares of stock for $100 each in January (an investment of $1000); we'll call these the \"\"early\"\" shares. The stock goes up to $200 in July, and you buy 10 more shares (investing an additional $2000); we'll call these the \"\"late\"\" shares. Then the stock drops to $150. Suppose you want $1500 in cash, so you are going to sell 10 shares. The 10 early shares you bought have increased in value, because you bought then for $100 but can now sell them for $150. The 10 late shares have decreased in value, because you bought them for $200 but can now only sell them for $150. If you choose to sell the early shares, you will have a capital gain of $500 ($1500 sale price minus $1000 purchase price), on which you may owe taxes. If you sell the late shares, you will have a capital loss of $500 ($1500 sale price minus $2000 purchase price is -$500), which you can potentially use to reduce your taxes. Or you could sell 5 of each and have no gain or loss (selling five early shares for $150 gives you a gain of $250, but selling five late shares for $150 gives you a loss of $250, and they cancel out). The point of all this is to say that the tax is not determined by the amount of cash you get, but by the difference between the sale price and the price you purchased for (known as the \"\"cost basis\"\"), and this in turn depends on which specific assets you sell. It is not enough to know the total amount you invested and the total gain. You need to know the specific cost basis (i.e., original purchase price) of the specific shares you're selling. (This is also the answer to your question about long-term versus short-term gains. It doesn't matter how much money you make on the sale. What matters is how long you hold the asset before selling it.) That said, many brokers will automatically sell your shares in a certain order unless you tell them otherwise (and some won't let you tell them otherwise). Often they will use the \"\"first in, first out\"\" rule, which means they will always sell the earliest-purchased shares first. To finally get to your specific question about Betterment, they have a page here that says they use a different method. Essentially, they try to sell your shares in a way that minimizes taxes. They do this by first selling shares that have a loss, and only then selling shares that have a gain. This basically means that if you want to cash out $X, and it is possible to do it in a way that incurs no tax liability, they will do that. What gets me very confused is if I continue to invest random amounts of money each month using Betterment, then I need to withdraw some cash, what are the tax implications. As my long answer above should indicate, there is no simple answer to this. The answer is \"\"it depends\"\". It depends on exactly when you bought the shares, exactly how much you paid for them, exactly when and how much the price rose or fell, and exactly how much you sell them for. Betterment is more or less saying \"\"Don't worry about any of this, trust us, we will handle everything so that your tax is minimized.\"\" A final note: if you really do want to track the details of your cost basis, Betterment may not be for you, because it is an automated platform that may do a lot of individual trades that a human wouldn't do, and that can make tracking the cost basis yourself very difficult. Almost the whole point of something like Betterment is that you are supposed to give them your money and forget about these details.\"", "title": "" } ]	fiqa
0c479c743b38d9eddb2e1eb9630045f1	APR for a Loan Paid Off Monthly	[ { "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": "4c6b9eb7fd9126ff2aad03854b5e0e6e", "text": "If your APR is quoted as nominal rate compounded monthly, the APR is 108.6 %. Here is the calculation, (done in Mathematica ). The sum of the discounted future payments (p) are set equal to the present value (pv) of the loan, and solved for the periodic interest rate (r). Details of the effective interest rate calculation can be found here. http://en.wikipedia.org/wiki/Effective_interest_rate#Calculation", "title": "" } ]	[ { "docid": "2948912ab138ec2aeae9dace2c07d281", "text": "You're looking for the amortization calculation. This calculation is essentially solving for the series of cash flows that will yield a zero balance after the specified term, at the given rate for a loan amount. Once you have solved for the payment amount, you can add additional principal amount to each payment period and see the interest payments and time to zero balance drop.", "title": "" }, { "docid": "b5ce0e715bbecbe660d6f410a6281b97", "text": "There is a way to get a reasonable estimate of what you still owe, and then the way to get the exact value. When the loan started they should have given you amortization table that laid out each payment including the principal, interest and balance for each payment. If there are any other fees included in the payment those also should have been detailed. Determine how may payments you have maid: did you make the first payment on day one, or the start of the next month? Was the last payment the 24th, or the next one? The table will then tell you what you owe after your most recent payment. To get the exact value call the lender. The amount grows between payment due to the interest that is accumulating. They will need to know when the payment will arrive so they can give you the correct value. To calculate how much you will save do the following calculation: payment = monthly payment for principal and interest paymentsmade =Number of payments made = 24 paymentsremaining = Number of payments remaining = 60 - paymentsmade = 60-24 = 36 instantpayoff = number from loan company savings = (payment * paymentsremaining ) - instantpayoff", "title": "" }, { "docid": "3a2c3ce0ee077dc612687cf11c42424f", "text": "Using the following loan equations where and With the balance b[n] in period n given by Applying the OP's figures Check & demonstration Switching to $96 payment every 10 days, with 365.2422 days per year Paying $96 every 10 days saves $326.85 and pays the loan down 2.68 months quicker.", "title": "" }, { "docid": "0b79e739abfa7b6baaacb30fcb6c8a82", "text": "Just to add: the 20% APR is the annualized interest rate, but applied monthly. So you'd be charged $0.50 of interest on your $30 balance, which gets capitalized on the next month. So if you were to miss the next payment for some reason, your new interest charge would be on $30.50 instead of $30 (actually, it'd be much more since there would be a fee for the late payment, but discounting that to illustrate the point).", "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": "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": "dec94b132f82bc2e4ffeb06c3e1b34f1", "text": "\"Loan officer here. Yes. You pay the per diem. I'd recommend not paying it off for like 6 months. You can pay it down to basically nothing and then hold it for six months and pay it off. Better for credit. If it's a simple interest rate, most car loans are, multiply the current principal balance by the interest rate and divide it by 365. That's the per diem or daily interest. For example, \"\"10,000 dollar auto loan at 3%. 100000.03= 300. 300/365= 0.82. So each day the balance is 10k the loan cost 82 cents. So in a month, your first payment is 100 dollars, 24.65 goes to interest 75.35 goes to principal. Then the new principal is 9924.65. So the next month, another 30 days with the new per diem of 0.815, the 100 payment is 75.50 in principal 24.50 in interest and so on.\"", "title": "" }, { "docid": "91d7641faa256507c857e5aca1d56be4", "text": "\"What you are looking for is the \"\"debt maturity profile\"\" (to make it easier to google. Most countries continuously roll over their debt, in effect just paying interest forever. So when your debt is due, you issue another loan for the same amount and use the new loan to pay off the old one.\"", "title": "" }, { "docid": "35a17764315ea36a8bfa9217ee3c244c", "text": "From here The formula is M = P ( J / (1 - (1 + J)^ -N)). M: monthly payment RESULT = 980.441... P: principal or amount of loan 63963 (71070 - 10% down * 71070) J: monthly interest; annual interest divided by 100, then divided by 12. .00275 (3.3% / 12) N: number of months of amortization, determined by length in years of loan. 72 months See this wikipedia page for the derivation of the formula", "title": "" }, { "docid": "151cb4b3a1d1eebe302685ca1a4fa112", "text": "Lower risk of having to fight to get their money back, obviously. That's what credit rating is supposed to predict. Paying your bills on time, and paying off the balance in full every month, are different questions. They want to know that you will make the minimum payments at least, and that you will eventually pay back the loan. Compare that with subprime and/or loan sharks, where the assumption is that being late or defaulting is more common, and interest rates are truly obscene in order to make a profit despite that.", "title": "" }, { "docid": "8b43f330c145b3509335301b690bd3eb", "text": "There is no interest outstanding, per se. There is only principal outstanding. Initially, principal outstanding is simply your initial loan amount. The first two sections discuss the math needed - just some arithmetic. The interest that you owe is typically calculated on a monthly basis. The interested owed formula is simply (pI)/12, where p is the principal outstanding, I is your annual interest, and you're dividing by 12 to turn annual to monthly. With a monthly payment, take out interest owed. What you have left gets applied into lowering your principal outstanding. If your actual monthly payment is less than the interest owed, then you have negative amortization where your principal outstanding goes up instead of down. Regardless of how the monthly payment comes about (eg prepay, underpay, no payment), you just apply these two calculations above and you're set. The sections below will discuss these cases in differing payments in detail. For a standard 30 year fixed rate loan, the monthly payment is calculated to pay-off the entire loan in 30 years. If you pay exactly this amount every month, your loan will be paid off, including the principal, in 30 years. The breakdown of the initial payment will be almost all interest, as you have noticed. Of course, there is a little bit of principal in that payment or your principal outstanding would not decrease and you would never pay off the loan. If you pay any amount less than the monthly payment, you extend the duration of your loan to longer than 30 years. How much less than the monthly payment will determine how much longer you extend your loan. If it's a little less, you may extend your loan to 40 years. It's possible to extend the loan to any duration you like by paying less. Mathematically, this makes sense, but legally, the loan department will say you're in breach of your contract. Let's pay a little less and see what happens. If you pay exactly the interest owed = (pI)/12, you would have an infinite duration loan where your principal outstanding would always be the same as your initial principal or the initial amount of your loan. If you pay less than the interest owed, you will actually owe more every month. In other words, your principal outstanding will increase every month!!! This is called negative amortization. Of course, this includes the case where you make zero payment. You will owe more money every month. Of course, for most loans, you cannot pay less than the required monthly payments. If you do, you are in default of the loan terms. If you pay more than the required monthly payment, you shorten the duration of your loan. Your principal outstanding will be less by the amount that you overpaid the required monthly payment by. For example, if your required monthly payment is $200 and you paid $300, $100 will go into reducing your principal outstanding (in addition to the bit in the $200 used to pay down your principal outstanding). Of course, if you hit the lottery and overpay by the entire principal outstanding amount, then you will have paid off the entire loan in one shot! When you get to non-standard contracts, a loan can be structured to have any kind of required monthly payments. They don't have to be fixed. For example, there are Balloon Loans where you have small monthly payments in the beginning and large monthly payments in the last year. Is the math any different? Not really - you still apply the one important formula, interest owed = (pI)/12, on a monthly basis. Then you break down the amount you paid for the month into the interest owed you just calculated and principal. You apply that principal amount to lowering your principal outstanding for the next month. Supposing that what you have posted is accurate, the most likely scenario is that you have a structured 5 year car loan where your monthly payments are smaller than the required fixed monthly payment for a 5 year loan, so even after 2 years, you owe as much or more than you did in the beginning! That means you have some large balloon payments towards the end of your loan. All of this is just part of the contract and has nothing to do with your prepay. Maybe I'm incorrect in my thinking, but I have a question about prepaying a loan. When you take out a mortgage on a home or a car loan, it is my understanding that for the first years of payment you are paying mostly interest. Correct. So, let's take a mortgage loan that allows prepayment without penalty. If I have a 30 year mortgage and I have paid it for 15 years, by the 16th year almost all the interest on the 30 year loan has been paid to the bank and I'm only paying primarily principle for the remainder of the loan. Incorrect. It seems counter-intuitive, but even in year 16, about 53% of your monthly payment still goes to interest!!! It is hard to see this unless you try to do the calculations yourself in a spreadsheet. If suddenly I come into a large sum of money and decide I want to pay off the mortgage in the 16th year, but the bank has already received all the interest computed for 30 years, shouldn't the bank recompute the interest for 16 years and then recalculate what's actually owed in effect on a 16 year loan not a 30 year loan? It is my understanding that the bank doesn't do this. What they do is just tell you the balance owed under the 30 year agreement and that's your payoff amount. Your last sentence is correct. The payoff amount is simply the principal outstanding plus any interest from (pI)/12 that you owe. In your example of trying to payoff the rest of your 30 year loan in year 16, you will owe around 68% of your original loan amount. That seems unfair. Shouldn't the loan be recalculated as a 16 year loan, which it actually has become? In fact, you do have the equivalent of a 15 year loan (30-15=15) at about 68% of your initial loan amount. If you refinanced, that's exactly what you would see. In other words, for a 30y loan at 5% for $10,000, you have monthly payments of $53.68, which is exactly the same as a 15y loan at 5% for $6,788.39 (your principal outstanding after 15 years of payments), which would also have monthly payments of $53.68. A few years ago I had a 5 year car loan. I wanted to prepay it after 2 years and I asked this question to the lender. I expected a reduction in the interest attached to the car loan since it didn't go the full 5 years. They basically told me I was crazy and the balance owed was the full amount of the 5 year car loan. I didn't prepay it because of this. That is the wrong reason for not prepaying. I suspect you have misunderstood the terms of the loan - look at the Variable Monthly Payments section above for a discussion. The best thing to do with all loans is to read the terms carefully and do the calculations yourself in a spreadsheet. If you are able to get the cashflows spelled out in the contract, then you have understood the loan.", "title": "" }, { "docid": "aa2964de81eca81d7599394cdb34f979", "text": "First of all any loan will have the last payment be slightly different than the rest. Even if the interest rate is zero it is hard to have a perfect monthly payment amount. By perfect I mean the amount of the loan divided by the number of months would be $ddd.cc0000... When looking at the amortization table the last payment will either be slightly higher or lower to adjust for the rounding that was done. My suspicion is that the rounding would have resulted in a left over 12 cents. It is also possible that you are paying it off slightly early and the computer is simply taking the leftover amount an spreading it over the remaining period of the loan. You could be paying it early because for the main part of the loan was paid to a company that rounds all payments to the higher dollar, or has a minimum monthly payment amount. I looked at the company you mentioned in the question, and searched the site for an amortization tool. I found it, and used the pre-filled in example. https://www.edfinancial.com/amortizationschedule?pmts=120&intr=6.8&prin=25000 If that last payment is not adjusted the borrower will still owe $0.12. The fact it equals your situation is a coincidence. But is does show what can happen.", "title": "" }, { "docid": "73162211768d136f87031dc72838e3b7", "text": "If you have a 20,000 balance and a 8.75% interest rate, you should be paying between $145 and $150 in interest each month, with the balance going to principal. (0.0875/12=0.007292, and that times 20,000 is 145.83; as interest is compounded daily, it'll be a little higher than that.) If the minimum is below $145, then you are not covering the interest; I suspect that is what is happening here, and they're reporting interest paid that wasn't covered in a prior month (assuming you have some months where you only pay the statement minimum, which is less than the total accrued interest). Assuming you're in the US (or most other western countries), your loan servicer should be explaining the exact amount each payment that goes to principal and interest. I recommend calling them up and finding out exactly why it's not consistent; what should be happening, assuming you pay more than the amount of interest each month, is the interest should go down (very) slowly each month and the amount paying off principal should go up (also slowly). EG: Etc., until eventually the interest is zero and your loan is paid off. It probably won't go this quickly for this size of loan - you're only paying off a tiny percentage of principal each month, $50/$20000 or 1/400th - so you won't make too much headway at this rate. Even adding another $25 would make a huge difference to the length of the loan and the amount of interest paid, but that's another story. You will eventually at this rate pay off the loan (at $200 a month for all 12 months); this isn't dissimilar to a 30 year mortgage in terms of percent interest to principal (in fact, it's better!). $50 a month times twelve is $600; 400 payments would take care of it (so a bit over 30 years). However, as you go you pay more principal and less interest, so you will actually pay it off in 15 years if you continue paying $200 a month exactly. What you may be seeing in your case is a combination of things: In months you pay less (ie, $100, say), the extra $45 in interest needs to go somewhere. It effectively becomes part of the principal, but from what I've seen that doesn't always happen directly - ie, they account it differently at least for a short time (up to a year, in my experience). This is because of tax laws, if I understand correctly - the amount you pay in interest is tax-deductible, but not the amount of the principal - so it's important for you to have as much called 'interest' as possible. Thus, if you pay $100 this month and $200 next month, that total of $300 is paying ~$290 of interest and $10 of principal, just as if you'd paid it $150 each month. If you had any penalties, such as for late payments, those come out off the top before interest; they may sometimes take that out as well. All in all, I strongly suggest having an enforced minimum (on your end) of the interest amount at least; that prevents you from being in a situation where your loan grows. If you can't always hit $200, that's fine; but at least hit $150 every single month. Otherwise you have a never ending cycle of student loan debt that you really don't want to be in. Separately, on the $1000 payment: As long as you make sure it's not assigned in such a way that the lender only accepts a month's worth at a time (which shouldn't happen, but there are shady lenders), it shouldn't matter what is called 'principal' and what is called 'interest'. The interest won't go up just because you're making a separate payment (it'll go down!). The portion that goes to interest will go to paying off the amount of interest you owe from the time of your last payment, plus any accrued but unpaid interest, plus principal. You won't have the option of not paying that interest, and it doesn't really matter anyway - it's all something you owe and all accruing interest, it only really matters for accounting and taxes. Double check with your lender (on the phone AND on their website, if possible) that overpayments are not penalized and are applied to principal immediately (or within a few days anyway) and you should be fine.", "title": "" }, { "docid": "47fb00c8ef165134dc0c437bddc54ebf", "text": "Ditto to Victor. The simple rule is: Pay the minimums on all so you don't get any late fees, etc, then pay off the highest interest rate loan first. A couple of special cases do come to mind: If one or more of these are credit cards, then, here in the U.S. at least, credit cards charge you interest on the average daily balance, unless you pay off the balance entirely, in which case you pay zero interest. So for example say you had two credit cards, both with 1% per month interest, with debt of $2000 and $1000. You have $1500 available. Ignoring minimum payments for the moment, if you put that $1500 against the larger balance, you would still pay interest on the full amount for the current month, or $30. But if you paid off the smaller and put the difference against the larger, then your interest for the current month would be only $15. (Either way, your interest for NEXT month would be the same -- 1% of the $1500 remaining balance or $15 -- assuming you couldn't pay off the other card.) If one or more of the loans are mortgage loans on which you are paying mortgage insurance, then when you get the balance below a certain point -- usually 80% of the original loan amount -- you no longer have to pay mortgage insurance premiums. Thus the amount you are paying on such premiums needs to be factored into the calculation. There may be other special cases. Those are the ones that I've run into.", "title": "" }, { "docid": "456a77712eae11ec6b49bbee70981064", "text": "Yes, by paying double the amount each month you would have in effect paid the loan off in less than half the time. For $13000 at 3% over 60 months your monthly repayments would be $233.59. If you double your monthly repayments to $467.18 you would end up paying the loan off by the end of the 29th months, more than halving your loan term, as long as there are no penalties for paying the loan off early.", "title": "" } ]	fiqa
7e73ce35226ae612fa715812d1265602	How much should a new graduate with new job put towards a car?	[ { "docid": "f1ebfd79bc9d4bef340a0a0db7ad909b", "text": "You are currently $30k in debt. I realize it is tempting to purchase a new car with your new job, but increasing your debt right now is heading in the wrong direction. Adding a new monthly payment into your budget would be a mistake, in my opinion. Here is what I would suggest. Since you have $7k in the bank, spend up to $6k on a nice used car. This will keep $1k in the bank for emergencies, and give you transportation without adding debt and a monthly payment. Then you can focus on knocking out the student loans. Won't it be nice when those student loans are gone? By not going further into debt, you will be much closer to that day. New cars are a luxury that you aren't in a position to splurge on yet.", "title": "" }, { "docid": "60107ac23bd15c65c2221bab687a1a2b", "text": "What are your goals in life? If one of them is to appear wealthy then buying a high price import is a great place to start. You certainly have the salary for it (congratulations BTW). If one of your goals is to build wealth, then why not buy a ~5000 to ~6000 car and have a goal to zero out that student loan by the end of the year? You can still contribute to your 401k, and have a nice life style living on ~60K (sending 30 to the student loan). Edit: I graduated with a CS degree in '96 and have been working in the industry since '93. When I started, demand was like it is now, rather insane. It probably won't always be like that and I would prepare for some ups and downs in the industry. One of the things that encouraged me to lead a debt free lifestyle happened in 2008. My employer cut salaries by 5%...no big deal they said. Except they also cut support pay, bonuses, and 401K matching. When the dust cleared my salary was cut 22%, and I was lucky as others were laid off. If you are in debt a 22% pay cut hurts bad.", "title": "" }, { "docid": "bfe9787224f701c084ffe7dbc2c998eb", "text": "\"As someone who has a very similar debt amount and environment (new grad, nice new paying job, want a car, etc), I'd like to share something with you. Life has unexpected costs. Luckily I didn't buy that new car the first few months out of college like I had planned to; I'm glad that I didn't because, as a fledgling \"\"adult\"\", despite having lived on my own while in college while working part-to-full time there are some things you just don't realize until it either happens or it happens to someone else. Here are some of those things: I could go on but I won't. $95K is good money and I would definitely recommend spending it a bit to enjoy yourself. But I would honestly tell you that taking your monthly expenses, adding a few hundred on top of that and then multiplying that sum by 3 would be a smart savings amount before picking up a car loan. Maybe that's an excessive savings but I've seen way too many people burn out over their cost-of-living and their failure to adjust appropriately when shit hits the fan. So instead of having to deal with the stab at your pride when having to lower the cost/quality of living that you'll probably grow accustomed to at a $95K salary, just prepare for the worst. Oh, and did I mention... A NEW JOB IS NOT A SECURE JOB Consider yourself to likely be the first asset dropped from the company if even the tiniest thing goes wrong. I know way too many people who were fresh hires at Intel, Boeing, and a few other big tech companies that pay around what you make and, despite being bad asses in college, they were dropped like a bad habit when their employers hit rough patches. To those even more experienced than me, please feel free to add to the list. I'd personally love to know them myself.\"", "title": "" }, { "docid": "4466ba3f24ae490ee0031707112d0bdb", "text": "In a very similar situation as yours, I bought a used motorcycle for $3000. It was still reasonably new, very reliable, and with California weather, you can use it year-round. It reduced my time in traffic, and it had very low fuel and maintenance costs. The biggest expense was tires. The biggest pitfall in buying a motorcycle is auto-insurance. Do your research and ask for quotes from your broker before even considering a particular model of bike. When I decided that my finances justified a new motorcycle, I was surprised that full collision coverage cost about $3000/year on a lower powered bike that had a bad accident record because it appealed to new riders. I got a much more powerful bike that appealed to more experienced riders and the premium was only $500/year. Is this answer not what you were looking for? Spend as little as you can on a 4-6 year old car. Drive it until you can save enough cash to buy the one you really want. I'm currently driving a 2007 Corolla, and I'm waiting until I can get a new civic turbo with a manual transmission to replace it. (They currently only offer them with a CVT, but next fall they'll have them with the MT, so I'm probably 2 1/2 years out from buying one used.)", "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": "ce8676528e1a2a117a0179043c2db82d", "text": "\"Money is a token that you can trade to other people for favors. Debt is a tool that allows you to ask for favors earlier than you might otherwise. What you have currently is: If the very worst were to happen, such as: You would owe $23,000 favors, and your \"\"salary\"\" wouldn't make a difference. What is a responsible amount to put toward a car? This is a tricky question to answer. Statistically speaking the very worst isn't worth your consideration. Only the \"\"very bad\"\", or \"\"kinda annoying\"\" circumstances are worth worrying about. The things that have a >5% chance of actually happening to you. Some of the \"\"very bad\"\" things that could happen (10k+ favors): Some of the \"\"kinda annoying\"\" things that could happen (~5k favors): So now that these issues are identified, we can settle on a time frame. This is very important. Your $30,000 in favors owed are not due in the next year. If your student loans have a typical 10-year payoff, then your risk management strategy only requires that you keep $3,000 in favors (approx) because that's how many are due in the next year. Except you have more than student loans for favors owed to others. You have rent. You eat food. You need to socialize. You need to meet your various needs. Each of these things will cost a certain number of favors in the next year. Add all of them up. Pretending that this data was correct (it obviously isn't) you'd owe $27,500 in favors if you made no money. Up until this point, I've been treating the data as though there's no income. So how does your income work with all of this? Simple, until you've saved 6-12 months of your expenses (not salary) in an FDIC or NCUSIF insured savings account, you have no free income. If you don't have savings to save yourself when bad things happen, you will start having more stress (what if something breaks? how will I survive till my next paycheck? etc.). Stress reduces your life expectancy. If you have no free income, and you need to buy a car, you need to buy the cheapest car that will meet your most basic needs. Consider carpooling. Consider walking or biking or public transit. You listed your salary at \"\"$95k\"\", but that isn't really $95k. It's more like $63k after taxes have been taken out. If you only needed to save ~$35k in favors, and the previous data was accurate (it isn't, do your own math): Per month you owe $2,875 in favors (34,500 / 12) Per month you gain $5,250 in favors (63,000 / 12) You have $7,000 in initial capital--I mean--favors You net $2,375 each month (5,250 - 2,875) To get $34,500 in favors will take you 12 months ( ⌈(34,500 - 7,000) / 2,375⌉ ) After 12 months you will have $2,375 in free income each month. You no longer need to save all of it (Although you may still need to save some of it. Be sure recalculate your expenses regularly to reevaluate if you need additional savings). What you do with your free income is up to you. You've got a safety net in saved earnings to get you through rough times, so if you want to buy a $100,000 sports car, all you have to do is account for it in your savings and expenses in all further calculations as you pay it off. To come up with a reasonable number, decide on how much you want to spend per month on a car. $500 is a nice round number that's less than $2,375. How many years do you want to save for the car? OR How many years do you want to pay off a car loan? 4 is a nice even number. $500 * 12 * 4 = $24,000 Now reduce that number 10% for taxes and fees $24,000 * 0.9 = $21,600 If you're getting a loan, deduct the cost of interest (using 5% as a ballpark here) $21,600 * 0.95 = $20,520 So according to my napkin math you can afford a car that costs ~$20k if you're willing to save/owe $500/month, but only after you've saved enough to be financially secure.\"", "title": "" }, { "docid": "33471b338e365b742e7811253db3b8f5", "text": "\"I have a slightly different take on this, compared to the other answers. In general, I think your emergency fund should always be at least 3K, especially if you own a used car that is out of warranty. Any number of unlucky auto repairs could easily cost over 2K. So, if you have 7K in savings, I would personally buy a car that is 4K or less or finance any amount of the car over 4K (if you can get a relatively low interest rate). Then I would pay down the financed portion of the car as quickly as possible while maintaining at least a 3K emergency fund. That being said, notice I mentioned \"\"In general\"\". Your situation may actually be quite different. If you don't have much debt, with your income you might be able to build up a couple of thousand in savings in a single month, and if so the above doesn't really apply. Even if you spent the entire 7K on a car, you'd likely have at least 3K in your emergency fund within 60-90 days. As for what's responsible, there are too many factors to dictate that. If you don't have many other expenses, you could possibly afford a $40K car, and I don't think anyone here could fairly call that \"\"irresponsible\"\" if you spent that much, though surely no one would call it \"\"responsible\"\" either. Perhaps the best advice is to buy the least expensive car you will be happy with. Many people regret overspending on a vehicle, but few regret underspending (unless they got a lemon that requires lots of repairs). Finally, you could also consider another option. You could get a very cheap car for 1K or less and drive it for a year. By then you may have closer to 20K saved up for a much nicer car than you can afford today.\"", "title": "" }, { "docid": "6cd61dc0b24ddb05e5df77719c29cbd3", "text": "Regardless of your circumstances, the amount of money you should put into a car is about $6000-8000 or the amount of cash you actually have, whichever is less. You can get a very reliable gently-used car in that price range, and a car that's plenty good to drive for basically whatever your budget is, down to about $1500-2000 or so. Spending more is never a financially sound decision; it's purely a luxury expenditure. Buying a car with a loan is always a financially bad decision.", "title": "" }, { "docid": "7601cecbda1474c13eb1d0a1744be4a7", "text": "\"As an absolute basic in life you always need 1 month's salary free and clear sitting in the bank. You do not have this. You don't even get to count that. It's what Napoleon would refer to as an \"\"iron reserve\"\": you have to have this. You actually won't even have this for some two or three months. Note that you have a staggering amount of debt. You have absolutely no assets. You own nothing. You have no savings. So at this point we can say \"\"Could your situation be any worse?\"\" and the answer is \"\"It could not be any worse.\"\" On the \"\"good things in your outlook\"\" side you have the idea that you probably have a job (it's unfortunate how you refer to it as \"\"will pay\"\" when you mean \"\"might pay\"\") but you're in perhaps the highest-expense, most-flakey economic zone on Earth. Recall that i) every company eventually closes and ii) every job eventually ends. The next incredible problem you face is that I'm guessing you just have no clue how expensive it is to insure and run a car. Any ideas of buying anything more than a junker is a non-starter, but on top of that you're not realizing how expensive it is going to be for you to run a car. Disturbingly, you have a very poor idea of even how far it is you have to drive each day. The only realistic solution for you is to bike each day to work (buy the cheapest possible bike); become the \"\"eccentric guy\"\" who really focusses on health. Bike in for an hour, shower at the office or a nearby gym, enjoy your day and bike home. You'll need a backpack to carry your pack lunch, buy the cheapest backpack. Since it's LA, it may be impractical. You may literally need a car. In that case, your only solution is That's the only thing you can do. Plain lean on your parents or relatives to borrow some old car and use that. (It will still cost you an awful lot of money to do so - repairs, tires, insurance, and everything else.) A reminder, You do not have your one-month \"\"iron reserve\"\". You have a staggering amount of debt. You have absolutely no assets. You own nothing. You have no savings. Additionally you live with the parents; you have a dream of a job (in one the highest-priced, most flakey regions) and \"\"job\"\" is another word for no security - jobs evaporate all the time for many reasons. Please be careful. Regarding a car, find a way to borrow one; offer to make a repair on it, say. Don't spend one cent on anything your first six months at work, concentrate only on your job. See where you are after six months.\"", "title": "" }, { "docid": "54df40bf61e056d37576ccc99111fa4c", "text": "So many answers here are missing the mark. I have a $100k mortgage--because that isn't paid off, I can't buy a car? That's really misguided logic. You have a reasonably large amount of college debt and didn't mention any other debt-- It's a really big deal what kind of debt this is. Is it unsecured debt through a private lender? Is it a federal loan from the Department of Education? Let's assume the worst possible (reasonable) situation. You lose your job and spend the next year plus looking for work. This is the boat numerous people out of college are in (far far far FAR more than the unemployment rates indicate). Federal loans have somewhat reasonable (indentured servitude, but I digress) repayment strategies; you can base the payment on your current income through income-based and income-continent repayment plans. If you're through a private lender, they still expect payment. In both cases--because the US hit students with ridiculous lending practices, your interest rates are likely 5-10% or even higher. Given your take-home income is quite large and I don't know exactly the cost of living where you live--you have to make some reasonable decisions. You can afford a car note for basically any car you want. What's the worst that happens if you can't afford the car? They take it back. If you can afford to feed yourself, house yourself, pay your other monthly bills...you make so much more than the median income in the US that I really don't see any issues. What you should do is write out all your monthly costs and figure out how much unallocated money you have, but I'd imagine you have enough money coming in to finance any reasonable new or used car. Keep in mind new will have much higher insurance and costs, but if you pick a good car your headaches besides that will be minimal.", "title": "" }, { "docid": "ac4094c5932096f13faf9926cfb1373a", "text": "\"I think the answer to how much you \"\"should\"\" spend depends on a few more questions: Once you answer these questions I think you'll have a better idea of what you should spend. If you have no financial goals then what kind of car you buy doesn't really matter. But if your goals are to build and accumulate wealth both in the short and long term then you should know that, by the numbers, a car is terrible financial investment. A new car loses thousands of dollars in value the moment you drive it off the lot. Buy the cheapest, reliable commuter you can ($5k or less) and use the extra money to pay off your debts. Then once your debts are paid off start investing that money. If you continue this frugal mindset with your other purchases (what house to buy, what food to eat, what indulgences to indulge in, etc...) and invest a bit, I think you'll find it pretty easy to create a giant amount of wealth.\"", "title": "" } ]	[ { "docid": "78b7e7d1ebadbacbc9ae26e90af8340f", "text": "The first thing that strikes me is: Is this a time-limited offer? Because if you can expect the offer to still be valid in a few weeks, why not just wait that month (which will earn you the money) and buy the car then? The second thing you need to consider is obviously the risk that in the interim, there will be an actual emergency which would require the money that you no longer have. The third thing to consider is whether you need the car now. Do you require a car to get around and your current one is breaking down, perhaps even to the point that repairing it would cost you more than buying a new car and it is currently not safe to drive? If so, compare the cost of repairing to the cost of buying; if the difference is small, and the new car would be more likely to be reliable than the old car after spending the money, then it can make sense to buy a new car and perhaps sell the old one in its current condition to someone who likes to tinker. (Even if you only recover a few hundreds of dollars, that's still money that perhaps you wouldn't otherwise have.) The fourth thing I would consider, especially given the time frame involved, is: Can you get a loan to buy the new car? Even if the interest rate is high, one month's worth of interest expense won't set you back very far, and it will keep the money in your emergency fund for if there is an actual emergency in the weeks ahead. Doing so might be a better choice than to take the money out of the emergency fund, if you have the opportunity; save the emergency fund for when that opportunity does not exist. And of course, without knowing how much you earn, take care to not end up with a car that is no more reliable than what you have now. Without knowing how much you earn and what the car you have in mind would cost, it's hard to say anything for certain, but if the car you have in mind costs less than a month's worth of net pay for you, consider whether it's likely to be reliable. Maybe you are making an absolutely stellar pay and the car will be perfectly fine; but there's that risk. Running the car by a mechanic to have it briefly checked out before buying it may be a wise move, just to make sure that you don't end up with a large car repair expense in a few months when the transmission gives up, for example.", "title": "" }, { "docid": "593ddbf35037a9785c3b2d77afd8a566", "text": "There needs to be more numbers with your choices, without those any answer is purely speculation. Assuming that India is much like the US, you are almost always better to go with a company leased car. That is if you are not responsible for the lease if your employment ends with the company. Here in the US companies typically reimburse, so tax free, their employees for about 50 cents per mile, or about 31 cents per kilometer. This barely covers the gas and insurance and falls way short when one includes deprecation and maintenance. So it is better to have the company to pick up all those costs. Borrowing money on a car is just plain dumb no matter what the interest rate. So I would stick with choice number 1 or 3 depending on the arrangement for the company leased car. The next question becomes how much you should spend for a car? I would say enough to keep you happy and safe, but not much more than that until you are wealthy.", "title": "" }, { "docid": "18eb4f81e1dbd0e3f013cffe592b5586", "text": "You are planning on buying a car that is 50% of your salary. Add your student debt to that and your total debt is >50% of your salary. I would suggest getting a few credit cards to build up credit, but can you manage that? Buying a 25k car with 55k salary is overspending. Get a second-hand car for 7k or so. Plus, buying a new car is not smart either, from a pricing standpoint, if you really want a new car, buy one that is 1 to 2 years old.", "title": "" }, { "docid": "3c1c88898b926b485388cd6fc43042dc", "text": "Question (which you need to ask yourself): How well are your friends paid for their work? What would happen if you just took your money and bought a garage, and hired two car mechanics? How would that be different from what you are doing? The money that you put into the company, is that paid in capital, or is it a loan to the company that will be repaid?", "title": "" }, { "docid": "76f84e708a51517019013542f87d9de6", "text": "On paper the whole 6 months living costs sounds (and is) great, but in real life there are a lot of things that you need to consider. For example, my first car was constantly falling apart and was an SUV that got 16MPG. I have to travel for work (about 300 miles per week) so getting a sedan that averages close to 40MPG saves me more in gas and maintenance than the monthly payment for the new car costs. When our apartment lease was up, the new monthly rent would have been $1685 per month, we got a 30 year mortgage with a monthly payment of $1372. So buying a house actually let us put aside more each month. We have just under 3 months of living expenses set aside (1 month in liquid assets, 2 months in a brokerage account) and I worry about it. I wish we had a better buffer, but in our case the house and car made more sense as an early investment compared to just squirreling away all our savings. Also, do you have any debt? Paying off debt (student loans, credit card debt, etc.) should often take top priority. Have some rainy day funds, of course, but pay down debts, and then create a personal financial plan for what works best in your situation. That would be my suggestion.", "title": "" }, { "docid": "64f9212da3a1b059f5771311c5862c51", "text": "Get rid of the lease and buy a used car. A good buy is an Audi because they are popular, high-quality cars. A 2007 Audi A4 costs about $7000. You will save a lot of money by dumping the lease and owning. Go for quality. Stay away from fad cars and SUVs which are overpriced for their value. Full sized sedans are the safest cars. The maintenance on a high-quality old car is way cheaper than the costs of a newer car. Sell the overseas property. It is a strong real estate market now, good time to sell. It is never good to have property far away from where you are. You need to have a timeline to plan investments. Are you going to medical school in one year, three years, five years? You need to make a plan. Every investment is a BUY and a SELL and you should plan for both. If your business is software, look for a revenue-generating asset in that area. An example of a revenue-generating asset is a license. For example, some software like ANSYS has license costs in the region of $30,000 annually. If you broker the license, or buy and re-sell the license you can make a good profit. This is just one example. Use your expertise to find the right vehicle. Make sure it is a REVENUE-GENERATING ASSET.", "title": "" }, { "docid": "98befa696835ac9629bee772926ca11a", "text": "I don't have a reference, but I think it depends on when you entered the workforce: If you finished school at age 24, your primary goals are to pay down expensive debt and to save up enough for a down payment. So essentially not much. Maybe $5k to $10k at the most. On the other hand if you entered the workforce at age 20, with no debts and no significant expenses, it should have been easy to sock away 20% of your income for 6 years, so $40k to $50k would be reasonable. The difference is that the first person's income earning potential should be higher, so eventually they'd be able to make up the difference and pass them.", "title": "" }, { "docid": "23fd7f9dc7b35a42c2e519670245b8b1", "text": "I've read online that 20% is a reasonable amount to pay for a car each month - Don't believe everything you read on the internet. But, let me ask, does your current car have zero expense? No fuel, no oil change, no repairs, no insurance? If the 20% is true, you are already spending a good chunk of it each month. My car just celebrated her 8th birthday. And at 125,000 miles, needed $3000 worth of maintenance repairs. The issue isn't with buying the expensive car, you can buy whatever you can afford, that's a personal preference. It's how you propose to budget for it that seems to be bad math. Other members here have already pointed out that this financial decision might not be so wise.", "title": "" }, { "docid": "336aa42c53d72c72b5139be22607f652", "text": "You may not have a good choice until you start that job. $2,000 is awfully low for a car, so it could be very risky. But you may not be able to get a loan until you start the new job. I would talk to a bank or credit union to get an idea of how much, if anything, you could borrow at this time. If you have a letter offering you the job that might help to get a loan. There are dealers who will finance a very cheap used car for anybody, but that kind of deal is likely to be at a very high interest rate and should be avoided. You could wind up with a debt and no car. One other possibility is to have a co-signer, such as a parent or other relative. That could make getting a car loan easy.", "title": "" }, { "docid": "80a3dfcc280d42c75783d1b8681fd3b8", "text": "If you want the new car, pay cash for it. Here's why: By paying cash for the car, you immediately save $2,500 off the price of the car. That is not insignificant, it's 8.3% off. By paying cash, you'll never be upside down on the car, and you can sell the car anytime you want. You said that all you need to do is beat the 0.9% interest rate with your investment to come out ahead. That doesn't take into account the discount you would have gotten by paying cash. $30,000 invested for 5 years at 1.6% (rough estimate) would get you $2,500 (the discount), so the rate you need to beat to come out ahead is actually 2.5%. Still doable, but it is much less of a sure thing on a 5 year investment, and much less worth the trouble. New cars are an expensive luxury. If you are wealthy enough, a new car certainly can be appropriate for you. However, if you don't like the idea of paying $30k in cash all at once, that is a strong indication that perhaps the new car is a luxury you aren't in a position to buy at this time. Borrowing the money and paying for it over time makes it psychologically easier to over spend on transportation.", "title": "" }, { "docid": "3a88dcc503cff3f8fa55827f93411082", "text": "Liquidity. That's the issue. You rent, and that's not bad. No new roof, boiler, etc. But, you have a car? Your savings is a guarantee that you'll not have to charge a $2000 transmission on an 18% credit card. You job may be secure, but employment (aside from self employment) is never 100% guaranteed. With $3000 income per month, I'd not prepay the student loan until I had at least $9000 in savings. We don't know your country, although we don't have fortnights in the US, so if you are in the US, you have a non-US background. Either way, if your employer offers any kind of matching retirement deposits, I'd prioritize that. Never leave that matched money on the table. You are off to a great start, this relatively low student loan debt shouldn't keep you awake at night.", "title": "" }, { "docid": "83f722d2f398117aafd522e4bfb3384e", "text": "I think you are making this more complicated that it has to be. In the end you will end up with a car that you paid X, and is worth Y. Your numbers are a bit hard to follow. Hopefully I got this right. I am no accountant, this is how I would figure the deal: The payments made are irrelevant. The downpayment is irrelevant as it is still a reduction in net worth. Your current car has a asset value of <29,500>. That should make anyone pause a bit. In order to get into this new car you will have to finance the shortfall on the current car (29,500), the price of the vehicle (45,300), the immediate depreciation (say 7,000). In the end you will have a car worth 38K and owe 82K. So you will have a asset value of <44,000>. Obviously a much worse situation. To do this car deal it would cost the person 14,500 of net worth the day the deal was done. As time marched on, it would be more as the reduction in debt is unlikely to keep up with the depreciation. Additionally the new car purchase screen shows a payment of $609/month if you bought the car with zero down. Except you don't have zero down, you have -29,500 down. Making the car payment higher, I estamate 1005/month with 3.5%@84 months. So rather than having a hit to your cash flow of $567 for 69 more months, you would have a payment of about $1000 for 84 months if you could obtain the interest rate of 3.5%. Those are the two things I would focus on is the reduction in net worth and the cash flow liability. I understand you are trying to get a feel for things, but there are two things that make this very unrealistic. The first is financing. It is unlikely that financing could be obtained with this deal and if it could this would be considered a sub-prime loan. However, perhaps a relative could finance the deal. Secondly, there is no way even a moderately financially responsible spouse would approve this deal. That is provided there were not sigificant assets, like a few million. If that is the case why not just write a check?", "title": "" }, { "docid": "8d280f9654cc7e6f9132494b19bc1d4f", "text": "Not long after college in my new job I bought a used car with payments, I have never done that since. I just don't like having a car payment. I have bought every car since then with cash. You should never borrow money to buy a car There are several things that come into play when buying a car. When you are shopping with cash you tend to be more conservative with your purchases look at this Study on Credit card purchases. A Dunn & Bradstreet study found that people spend 12-18% more when using credit cards than when using cash. And McDonald's found that the average transaction rose from $4.50 to $7.00 when customers used plastic instead of cash. I would bet you if you had $27,000 dollars cash in your hand you wouldn't buy that car. You'd find a better deal, and or a cheaper car. When you finance it, it just doesn't seem to hurt as bad. Even though it's worse because now you are paying interest. A new car is just insanity unless you have a high net worth, at least seven figures. Your $27,000 car in 5 years will be worth about $6500. That's like striking a match to $340 dollars a month, you can't afford to lose that much money. Pay Cash If you lose your job, get hurt, or any number of things that can cost you money or reduce your income, it's no problem with a paid for car. They don't repo paid for cars. You have so much more flexibility when you don't have payments. You mention you have 10k in cash, and a $2000 a month positive cash flow. I would find a deal on a 8000 - 9000 car I would not buy from a dealer. Sell the car you have put that money with the positive cash flow and every other dime you can get at your student loans and any other debt you have, keep renting cheap keep the college lifestyle (broke) until you are completely out of debt. Then I would save for a house. Finally I would read this Dave Ramsey book, if I would have read this at your age, I would literally be a millionaire by now, I'm 37. Don't buy from a dealer Find a private sale car that you can get a deal on, pay less than Kelly Blue Book. Pay a little money $50 - 75 to have an automotive technician to check it out for you and get a car fax, to make sure there are no major problems. I have worked in the automotive industry for 20 + years and you rarely get a good deal from a dealer. “Everything popular is wrong.” Oscar Wilde", "title": "" }, { "docid": "f53e7860ba48e7461c301a161d1047e8", "text": "\"You have a job \"\"lined up\"\". What if it falls through? Then you have to sell your fancy car, and you are back to scare, apart from the dough you owe your dad. For consumption items, live within your means. A cheap first car is just fine. Spend cash where it brings you more cash.\"", "title": "" }, { "docid": "9c7b4c73d0cfa05f6db8ec14315332e2", "text": "Suppose you're a European Company, selling say a software product to a US company. As much as you might want the US company to pay you in Euros they might insist (or you'll lose the contract) that you agree pricing in USD. The software is licensed on a yearly recurring amount, say 100K USD per year payable on the 1st January every year. In this example, you know that on the 1st Jan that 100K USD will arrive in your USD bank account. You will want to convert that to Euros and to remove uncertainty from your business you might take out an FX Forward today to remove your currency risk. If in the next 9 months the dollar strengthens against the Euro then notionally you'll have lost out by taking out the forward. Similarly, you've notionally gained if the USD weakens against the EURO. The forward gives you the certainty you need to plan your business.", "title": "" } ]	fiqa
36283d8ff18b4c4b44aef4f1ac8df0be	What factors of a stock help determine its potential	[ { "docid": "a4afa8c2f6d30d437aba51b7bd25b53b", "text": "Knowing the answer to this question is generally not as useful as it may seem. The stock's current price is the consensus of thousands of people who are looking at the many relevant factors (dividend rate, growth prospects, volatility, risk, industry, etc.) that determine its value. A stock's price is the market's valuation of the cash flows it entitles you to in the future. Researching a stock's value means trying to figure out if there is something relevant to these cash flows that the market doesn't know about or has misjudged. Pretty much anything we can list for you here that will affect a stock's price is something the market knows about, so it's not likely to help you know if something is mispriced. Therefore it's not useful to you. If you are not a true expert on how important the relevant factors are and how the market is reacting to them currently (and often even if you are), then you are essentially guessing. How likely are you to catch something that the thousands of other investors have missed and how likely are you to miss something that other investors have understood? I don't view gambling as inherently evil, but you should be clear and honest with yourself about what you are doing if you are trying to outperform the market. As people become knowledgeable about and experienced with finance, they try less and less to be the one to find an undervalued stock in their personal portfolio. Instead they seek to hold a fully diversified portfolio with low transactions costs and build wealth in the long term without wasting time and money on the guessing game. My suggestion for you is to transition as quickly as you can to behave like someone who knows a lot about finance.", "title": "" } ]	[ { "docid": "081512f0aaafbef6ec324b5e271c4821", "text": "\"Check out Professor Damodaran's website: http://pages.stern.nyu.edu/~adamodar/ . Tons of good stuff there to get you started. If you want more depth, he's written what is widely considered the bible on the subject of valuation: \"\"Investment Valuation\"\". DCF is very well suited to stock analysis. One doesn't need to know, or forecast the future stock price to use it. In fact, it's the opposite. Business fundamentals are forecasted to estimate the sum total of future cash flows from the company, discounted back to the present. Divide that by shares outstanding, and you have the value of the stock. The key is to remember that DCF calculations are very sensitive to inputs. Be conservative in your estimates of future revenue growth, earnings margins, and capital investment. I usually develop three forecasts: pessimistic, neutral, optimistic. This delivers a range of value instead of a false-precision single number. This may seem odd: I find the DCF invaluable, but for the process, not so much the result. The input sensitivity requires careful work, and while a range of value is useful, the real benefit comes from being required to answer the questions to build the forecast. It provides a framework to analyze a business. You're just trying to properly fill in the boxes, estimate the unguessable. To do so, you pore through the financials. Skimming, reading with a purpose. In the end you come away with a fairly deep understanding of the business, how they make money, why they'll continue to make money, etc.\"", "title": "" }, { "docid": "1dc5ad53dbebd7ef9cc8e2a028298b67", "text": "\"You are probably going to hate my answer, but... If there was an easy way to ID stocks like FB that were going to do what FB did, then those stocks wouldn't exist and do that because they would be priced higher at the IPO. The fact is there is always some doubt, no one knows the future, and sometimes value only becomes clear with time. Everyone wants to buy a stock before it rises right? It will only be worth a rise if it makes more profit though, and once it is established as making more profit the price will be already up, because why wouldn't it be? That means to buy a real winner you have to buy before it is completely obvious to everyone that it is going to make more profit in the future, and that means stock prices trade at speculative prices, based on expected future performance, not current or past performance. Now I'm not saying past and future performance has nothing in common, but there is a reason that a thousand financially oriented websites quote a disclaimer like \"\"past performance is not necessarily a guide to future performance\"\". Now maybe this is sort of obvious, but looking at your image, excluding things like market capital that you've not restricted, the PE ratio is based on CURRENT price and PAST earnings, the dividend yield is based on PAST publications of what the dividend will be and CURRENT price, the price to book is based on PAST publication of the company balance sheet and CURRENT price, the EPS is based on PAST earnings and the published number of shares, and the ROI and net profit margin in based on published PAST profits and earnings and costs and number of shares. So it must be understood that every criteria chosen is PAST data that analysts have been looking at for a lot longer than you have with a lot more additional information and experience with it. The only information that is even CURRENT is the price. Thus, my ultimate conclusive point is, you can't based your stock picks on criteria like this because it's based on past information and current stock price, and the current stock price is based on the markets opinion of relative future performance. The only way to make a good stock pick is understand the business, understand its market, and possibly understand world economics as it pertains to that market and business. You can use various criteria as an initial filter to find companies and investigate them, but which criteria you use is entirely your preference. You might invest only in profitable companies (ones that make money and probably pay regular dividends), thus excluding something like an oil exploration company, which will just lose money, and lose it, and lose some more, forever... unless it hits the jackpot, in which case you might suddenly find yourself sitting on a huge profit. It's a question of risk and preference. Regarding your concern for false data. Google defines the Return on investment (TTM) (%) as: Trailing twelve month Income after taxes divided by the average (Total Long-Term Debt + Long-Term Liabilities + Shareholders Equity), expressed as a percentage. If you really think they have it wrong you could contact them, but it's probably correct for whatever past data or last annual financial results it's based on.\"", "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": "3acf275d77964f6b617beee49dcc0d64", "text": "There are those who would suggest that due to the Efficient Market Hypothesis, stocks are always fairly valued. Consider, if non-professional posters on SE (here) had a method that worked beyond random chance, everyone seeking such a method would soon know it. If everyone used that method, it would lose its advantage. In theory, this is how stocks' values remain rational. That said, Williams %R is one such indicator. It can be seen in action on Yahoo finance - In the end, I find such indicators far less useful than the news itself. BP oil spill - Did anyone believe that such a huge oil company wouldn't recover from that disaster? It recovered by nearly doubling from its bottom after that news. A chart of NFLX (Netflix) offers a similar news disaster, and recovery. Both of these examples are not quantifiable, in my opinion, just gut reactions. A quick look at the company and answer to one question - Do I feel this company will recover? To be candid - in the 08/09 crash, I felt that way about Ford and GM. Ford returned 10X from the bottom, GM went through bankruptcy. That observation suggests another question, i.e. where is the line drawn between 'investing' and 'gambling'? My answer is that buying one stock hoping for its recovery is gambling. Being able to do this for 5-10 stocks, or one every few months, is investing.", "title": "" }, { "docid": "5454e160157a86cd1775242c0efdbbb4", "text": "Your understanding of the stock market is absolutely correct theoretically. However there is a lot more to it. A stock on a given day is effected by a lot of factors. These factors could really be anything. For example, if you are buying a stock in an agricultural company and there was no rainfall this year, there is a big chance that your stock will lose value. There is also a chance that a war breaks out tomorrow and due to all the government spending on the war, the economy collapses and effects the prices of stocks. Why does this happen? This happens because bad rainfall or war can get people to lose confidence in a stock market. On the other hand GDP growth and low unemployment rates can make people think positive and increase the demand in a stock driving the prices up. The main factor in the stock market is sentiment(How people perceive certain news). This causes a stock to rise or fall even before the event actually happens. (For example:- Weather pundits predicted good rainfall for next year. That news is already known to people, so if the weather pundit was correct, it might not drive the prices up. However, if the rainfall was way better than people expected it to be it would drive the price up and vice versa. These are just examples at a basic level. There are a lot of other factors which determine the price of the stock. The best way to look at it(In my personal opinion) is the way Warren Buffet puts it, i.e. look at the stock as a business and see the potential growth over a long period of time. There will be unexpected events, but in the long run, the business must be profitable. There are various ways to value a company such as Price to earnings ratios, PEG ratios, discounted cash flows and you can also create your own. See what works best for you and record your success/failure ratio before you actually put money in. Good Luck,", "title": "" }, { "docid": "a553405f8eccfb06d6fae1018d4ab54a", "text": "\"For a retail investor who isn't a Physics or Math major, the \"\"Beta\"\" of the stock is probably the best way to quantify risk. Examples: A Beta of 1 means that a stock moves in line with the market. Over 1 means that you would expect the stock to move up or down faster than the market as a whole. Under 1 means that you would expect the stock to move slower than the market as a whole.\"", "title": "" }, { "docid": "aa8a751d2ab770960a9a404ff8225cf8", "text": "The stock market is generally a long term investment platform. The share prices reflect more the companies potential to be profitable in the future rather than its actual value. Companies that have good potential can over perform their actual value. We saw this regularly in the early days of the internet prior to the .com bust. Companies would go up exponentially based on their idea's and potential. Investors learned from that and are demanding more these days. As a result companies that do not show growth potential go down. Companies that show growth and potential (apple and google for 2 easy examples) continue to go up. Many companies have specific days where employees can buy and sell stocks. there are minor ripples in the market on these days as the demand and supply are temporarily altered by a large segment of the owner base making trades. For this reason some companies have a closed pool that is only open to inside trades that then executes the orders over time so that the effect is minimized on the actual stock price. This is not happening with face book. Instead many of the investors are dumping their stock directly into the market. These are savvy investors and if there was potential for profit remaining you would not see the full scale exodus from the stock. The fact that it is visible is scaring off investors itself. I can not think of another instance that has gone like facebook, especially one that was called so accurately by many industry pundits.", "title": "" }, { "docid": "d8670fb91e11f17dc0a85b420ec57534", "text": "Have a read of this PF&M article, which @Blackjack has an excellent answer that speaks around risk. Answers which suggest that the return is proportional to the amount invested is a very simplistic argument. It is far more complex than that. I would content that your initial question Does investing more money into stocks increase chances of profit? is not the best question. The answer is it depends upon your investment methodology. The following will increase your chance of overall profit in the stock market", "title": "" }, { "docid": "4f214c7896e53e4033f83168ea3ed4c4", "text": "The value of a share depends on the value of the company, which involves a lot more than the value of its assets -- it requires making decisions about what you think will happen to the company in the future. That's inherently not something that can be reduced to a single formula, at least not unless you can figure out how to represent your guesses and your confidence in them in the formula ... and even if you could do all that it would only say what you think the stock is worth; others will be using different numbers and legitimately get different results. Disagreement over value is what the stock market is all about, I'm afraid.", "title": "" }, { "docid": "7ccebb6bcea7089d89b1fd72e66e3b81", "text": "Thank you for replying. I'm not sure I totally follow though, aren't you totally at mercy of the liquidity in the stock? I guess I'm havinga hard time visualizing the value a human can add as opposed to say vwapping it or something. I can accept that you're right, just having a difficult time picturing it", "title": "" }, { "docid": "7cfb787181731c3db190ce83e73934f7", "text": "You can't. If there was a reliable way to identify an undervalued stock, then people would immediately buy it, its price would rise and it wouldn't be undervalued any more.", "title": "" }, { "docid": "b648eff366f6e5637857115c7754cff1", "text": "Other metrics like Price/Book Value or Price/Sales can be used to determine if a company has above average valuations and would be classified as growth or below average valuations and be classified as value. Fama and French's 3 Factor model would be one example that was studied a great deal using an inverse of Price/Book I believe.", "title": "" }, { "docid": "efdd180becfba8054bd6540931d916d8", "text": "\"Volume is really only valuable when compared to some other volume, either from a historical value, or from some other stock. The article you linked to doesn't provide specific numbers for you to evaluate whether volume is high or low. Many people simply look at the charts and use a gut feel for whether a day's volume is \"\"high\"\" or \"\"low\"\" in their estimation. Typically, if a day's volume is not significantly taller than the usual volume, you wouldn't call it high. The same goes for low volume. If you want a more quantitative approach, a simple approach would be to use the normal distribution statistics: Calculate the mean volume and the standard deviation. Anything outside of 1.5 to 2.0 standard deviations (either high or low) could be significant in your analysis. You'll need to pick your own numbers (1.5 or 2.0 are just numbers I pulled out of thin air.) It's hard to read anything specific into volume, since for every seller, there's a buyer, and each has their reasons for doing so. The article you link to has some good examples of using volume as a basis for strengthening conclusions drawn using other factors.\"", "title": "" }, { "docid": "8ef5ae799f8b31bb763122fa08838f1e", "text": "Benjamin Grahams strategy was to invest in REALLY SAFE stocks. In his time lean businesses weren't as common as they are now and he found many companies with assets greater than the value of their shares. Putting a number figure on it isn't really necessary but the concept is useful. Its the idea that bigger companies are less turbulent (Which is something to avoid for an investor). Most companies in the top 500 or whatever will satisfy this.", "title": "" }, { "docid": "95e14f9ff973022efe1305278dc0fa88", "text": "There's actual value and value that comes from potential for growth. I would imagine that their fundamentals are stronger, they have more advertising revenue than 2 years ago but their vision for the future and potential value is lower. So it's up to you the investor in the market to decide where you value it and to either buy sell or sit out", "title": "" } ]	fiqa
370ac353ce847e382015a1d5915b5674	4 months into a 30 month car loan, need new engine, can't sell any body parts	[ { "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": "" } ]	[ { "docid": "0b2ff24c4725b56cdb4063cb717b2ed1", "text": "Right! He actually plans on selling it and getting a car to save on fuel and cut down the payment a few hundred a month. The problem is, he bought it last June and we still like nearly a year before we are allowed to trade it in. But we are more than ready for that day to come! Lol", "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": "46e0fd4a0513b1e04e20f5ec1819ed82", "text": "Sometimes I think it helps to think of the scenario in reverse. If you had a completely paid off car, would you take out a title loan (even at 0%) for a few months to put the cash in a low-interest savings account? For me, I think the risk of losing the car due to non-payment outweighs the tens of dollars I might earn.", "title": "" }, { "docid": "1c4d36d1c862dd9d2cccce47377bcd2c", "text": "Fair enough. I was just trying to save them money. If it were me, I'd call up the dealer first and threaten to contact local media if they didn't void the contract. In the end though a lawyer is probably the best bet. Even just having them write a letter to send over would probably get them to nullify it.", "title": "" }, { "docid": "795e112ad3c0a82dbbb6c2ad2b694d40", "text": "It's her car. Unlike what Ross said in the comments she can't sign it over to you--she doesn't own it yet. The best you'll be able to do is have her leave it to you in her will--but beware that you very well might need to refinance the loan at that point.", "title": "" }, { "docid": "be2775a7348a4342d1577d40a0478832", "text": "Sounds like you need to contact your ex and sort it out. If you have co-signed the loan, changes are you are equally responsible even if on party chooses not to pay, then the bank will come after the other one. If you no longer wish to be part of the arrangement and your ex still wants the car, she will have to buy you out of the car and become fully responsible for the liability.", "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": "b10a6a9f11ddd5e980624a5df4c0c0f8", "text": "Car dealers as well as boat dealers, RV dealers, maybe farm vehicle dealers and other asset types make deals with banks and finance companies to they can make loans to buyers. They may be paying the interest to the finance companies so they can offer a 0% loan to the retail customer for all or part of the loan term. Neither the finance company nor the dealer wants to make such loans to people who are likely to default. Such customers will not be offered this kind of financing. But remember too that these loans are secured by the asset - the car - which is also insured. But the dealer or the finance company holds that asset as collateral that they can seize to repay the loan. So the finance company gets paid off and the dealer keeps the profit he made selling the car. So these loans are designed to ensure the dealer nor the finance company looses much. These are called asset finance loans because there is always an asset (the car) to use as collateral.", "title": "" }, { "docid": "2ef47bc6e77a08529092f461b85d993b", "text": "\"The lead story here is you owe $12,000 on a car worth $6000!! That is an appalling situation and worth a lot to get out of it. ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.) I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period. Now comes an \"\"adversary\"\", who is threatening to snatch the car away from you. I have to imagine they are emotionally motivated. How convenient :) Let them take it. But it's important to fully understand their motivations here. Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down. Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers. Let them win the battle; you win the war: make sure the legal details put you in the clear of it. Ideally, do this with consent with the grandfather \"\"in response to his direct family's wishes\"\", but keep up the theater of being really mad about it. Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it. Eventually they'll figure out they took a $6000 loss taking the car from you, and want to talk with you about that. Stay with blind rage at how they took my car. If they try to explain what \"\"upside down\"\" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go? If they ask for money, say they're swindling. \"\"You forced me, I didn't have a choice\"\". (which happens to be a good defense. They wanted it so bad; they shoulda done their homework. Since they were coercive it's not your job to disclose, nor your job to even know.) If they want you to take the car back, say \"\"can't, you forced me to buy another and I have to make payments on that one now.\"\"\"", "title": "" }, { "docid": "f88dded301c180c38ceda078c73a1813", "text": "California bankruptcy law requires disclosure of any gift made by the person declaring bankruptcy in the past 12 months, and any asset transfers in the past 2 years (with a couple of minor exceptions). This would most certainly include the car, if it is regifted back to you. Such a claim would likely be considered fraudulent, though this would be a matter for the lawyers and bankruptcy trustee in question. There's a blog which you may wish to check out, the California Bankruptcy Blog, which has a specific entry on gifts. Now, there is a specific exemption for automobiles, but only up to a total of $2725. Legally, I believe there's nothing you can do here. If the $10K was a loan, it will be discharged in bankruptcy. If it was a gift, it'll have to be declared and the car will have to be sold. If regifted or transferred, it must be declared and will likely (but not definitely) be determined as an invalid disposal of assets. Either you or your family member will have to discuss this with a bankruptcy lawyer. I'm sorry your generous act is likely to get tangled up here. :(", "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": "775bc1a59adf005fc27e647115a69a72", "text": "I recently drove past Winslow, Arizona and knocked out the fuel pump in my truck. It cost $500 to repair, and the tow would have been another several hundred if I hadn't had a Good Samaritan's club card, since it was the weekend. 2-3 days would not be acceptable in this sort of scenario. And that was just the fuel pump!", "title": "" }, { "docid": "bd5930583bb29a301015383439a583da", "text": "If You use the car regulary, I don't think that driving on the bald tires for 3 years is a reasonable option. Have You considered buying used tires? Those will be cheaper and will last till You get to replace the car.", "title": "" }, { "docid": "5439557d04ffe4abc076ed38d0fb9d80", "text": "On the off chance that I am not wrong, at that point you should be included money and you are proposing to get it by offering your garbage auto. This is genuinely a smart thought, as there are a large number of auto merchants who demonstrate their enthusiasm for old autos. Your auto specialist needs to have disclosed to you the money for garbage autos Tampa which couldn't be more than two or three hundred dollars.", "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": "" } ]	fiqa
4cff8b5dcfa29d576e2b65c831dd1242	Can I invest in the USA or EU from an Asian 3rd-world country, over the Internet?	[ { "docid": "2e04d8fce524207578d6965de2095c43", "text": "Absolutely. It does highly depend on your country, as US brokerages are stricter with or even closed to residents of countries that produce drugs, launder money, finance terror, have traditional difficulty with the US, etc. It also depends on your country's laws. Some countries have currency controls, restrictions on buying foreign/US securities, etc. That said, some brokerages have offices world-wide, so there might be one near you. If your legal situation as described above is fortunate, some brokers will simply allow you to setup online using a procedure not too different from US residents: provide identification, sign tons of documents. You'll have to have a method to deliver your documentation in the ways you'd expect: mail, fax, email. E*Trade is the best starter broker, right now, imo. Just see how far you can go in the sign-up process.", "title": "" } ]	[ { "docid": "746fadc47e6606d3a1730a15c59391f2", "text": "I just finished a high frequency trading project. Individuals can do it, but you need a lot of capital. You can get a managed server in Times Square for $1500/month, giving you access to 90% of the US exchanges that matter, their data farms are within 3 milliseconds of distance (latency). You can also get more servers in the same building as the exchanges, if you know where to look ;) thats all I can divulge good luck", "title": "" }, { "docid": "40f4b295402b38de190ba9198138eea9", "text": "\"Currency, like gold and other commodities, isn't really much of an investment at all. It doesn't actually generate any return. Its value might fluctuate at a different rate than that of the US dollar or Euro, but that's about it. It might have a place as a very small slice of a basket of global currencies, but most US / European households don't actually need that sort of basket; it's really more of a risk-management strategy than an investment strategy and it doesn't really reflect the risks faced by an ordinary family in the US (or Europe or similar). Investments shouldn't generally be particularly \"\"exciting\"\". Generally, \"\"exciting\"\" opportunities mean that you're speculating on the market, not really investing in it. If you have a few thousand dollars you don't need and don't mind losing, you can make some good money speculating some of the time, but you can also just lose it all too. (Maybe there's a little room for excitement if you find amazing deals on ordinary investments at the very bottom of a stock market crash when decent, solid companies are on sale much cheaper than they ordinarily are.)\"", "title": "" }, { "docid": "bdf650532eeac544396f3ee828af637c", "text": "No, it's not. This could be a great question, but with no background, not so much. Do you live there now? For how long, and how much longer? You say investment, are you looking to live in it or rent it out? I have nothing against China, but I'd not buy anywhere unless the price, location, and timing all were right.", "title": "" }, { "docid": "55094532cddaab9387ee3ea1019fb387", "text": "First thing to consider is that getting your hands on an IPO is very difficult unless you have some serious clout. This might help a bit in that department (http://www.sec.gov/answers/ipoelig.htm) However, assuming you accept all that risk and requirements, YES - you can buy stocks of any kind in the US even if you are a foreigner. There are no laws prohibiting investment/buying in the US stock market. What you need is to get an online trading account from a registered brokerage house in the US. Once you are registered, you can buy whatever that is offered.", "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": "15404acf93f7162857cc0bc696e09b11", "text": "\"There are firms that let you do this. I believe that Saxo Bank is one such firm (note that I'm not endorsing the company at all, and have no experience with it) Keep in mind that the reason that these currencies are \"\"exotic\"\" is because the markets for trading are small. Small markets are generally really bad for retail/non-professional investors. (Also note: I'm not trying to insult Brazil or Thailand, which are major economies. In this context, I'm specifically concerned with currency trading volume.)\"", "title": "" }, { "docid": "74b29da71765c7cbe5d01f3f964e4834", "text": "That's a broad question, but I can throw some thoughts at you from personal experience. I'm actually an Australian who has worked in a couple of companies but across multiple countries and I've found out first hand that you have a wealth of opportunities that other people don't have, but you also have a lot of problems that other people won't have. First up, asset classes. Real estate is a popular asset class, but unless you plan on being in each of these countries for a minimum of one to two years, it would be seriously risky to invest in rental residential or commercial real estate. This is because it takes a long time to figure out each country's particular set of laws around real estate, plus it will take a long time to get credit from the local bank institutions and to understand the local markets well enough to select a good location. This leaves you with the classics of stocks and bonds. You can buy stocks and bonds in any country typically. So you could have some stocks in a German company, a bond fund in France and maybe a mutual fund in Japan. This makes for interesting diversification, so if one country tanks, you can potentially be hedged in another. You also get to both benefit and be punished by foreign exchange movements. You might have made a killing on that stock you bought in Tokyo, but it turns out the Yen just fell by 15%. Doh. And to top this off, you are almost certainly going to end up filling out tax returns in each country you have made money in. This can get horribly complicated, very quickly. As a person who has been dealing with the US tax system, I can tell you that this is painful and the US in particular tries to get a cut of your worldwide income. That said, keep in mind each country has different tax rates, so you could potentially benefit from that as well. My advice? Choose one country you suspect you'll spend most of your life in and keep most of your assets there. Make a few purchases in other places, but minimize it. Ultimately most ex-pats move back to their country of origin as friends, family and shared culture bring them home.", "title": "" }, { "docid": "a8d2b79642f69b96d682fd6049896ed9", "text": "I won't think so. Too much trouble for the compliance and internal audit team. Unless you are moving money from Russia, Iran or those non-FATCA countries.", "title": "" }, { "docid": "f3932cc2002b359f9b9105bc0e28a203", "text": "You can invest upto $200K per year abroad, and yes, you can buy Google as a stock. Consider opening an international account with a broker like interactive brokers (www.interactivebrokers.co.in) which allows you to fund the account from your local Indian account, and then on, buy shares of companies listed abroad.", "title": "" }, { "docid": "775ac18eb809a9fb312b7dc550e92aa8", "text": "For question #1, at least some US-based online brokers do permit direct purchases of stocks on foreign exchanges. Depending on your circumstances, this might be more cost effective than purchasing US-listed ADRs. One such broker is Interactive Brokers, which allows US citizens to directly purchase shares on many different foreign exchanges using their online platform (including in France). For France, I believe their costs are currently 0.1% of the total trade value with a 4€ minimum. I should warn you that the IB platform is not particularly user-friendly, since they market themselves to traders and the learning curve is steep (although accounts are available to individual investors). IB also won't automatically convert currencies for you, so you also need to use their foreign exchange trading interface to acquire the foreign currency used to purchase a foreign stock, which has plusses and minuses. On the plus side, their F/X spread is very competitive, but the interface is, shall we say, not very intuitive. I can't answer question #2 with specific regards to US/France. At least in the case of IB, though, I believe any dividends from a EUR-denominated stock would continue to accumulate in your account in Euros until you decide to convert them to dollars (or you could reinvest in EUR if you so choose).", "title": "" }, { "docid": "dcf69b9f8e93239ee0c989a9ae988837", "text": "This is finance, just because your from India doesn't mean much (And I was born and spent a good part of my youth in Kerala). I pretty actively invest in emerging markets and while India has a large number of problems, it is still looking like a good investment in this global environment.", "title": "" }, { "docid": "6cc39d91d4ee180fe587330a6019f814", "text": "You can try paper trading to sharpen your investing skills(identifying stocks to invest, how much money to allocate and stuff) but nothing compares to getting beaten black and blue in the real world. When virtual money is involved you mayn't care, because you don't loose anything, but when your hard earned money disappears or grows, no paper trading can incite those feelings in you. So there is no guarantee that doing paper trading will make you a better investor, but can help you a lot in terms of learning. Secondly educate yourself on the ways of investing. It is hard work and realize that there is no substitute for hard work. India is a growing economy and your friends maybe safe in the short term but take it from any INVESTOR, not in the long run. And moreover as all economies are recovering from the recession there are ample opportunities to invest money in India both good and bad. Calculate your returns and compare it with your friends maybe a year or two down the lane to compare the returns generated from both sides. Maybe they would come trumps but remember selecting a good investment from a bad investment will surely pay out in the long run. Not sure what you do not understand what Buffet says. It cannot get more simpler than that. If you can drill those rules into your blood, you mayn't become a billionaire but surely you will make a killing, but in the long run. Read and read as much as you can. Buy books, browse the net. This might help. One more guy like you.", "title": "" }, { "docid": "a2835b6174f6b3e73ae2a2cdda2658eb", "text": "Quite a few stock broker in India offer to trade in US markets via tie-up brokers in US. As an Indian citizen, there are limits as to how much FX you can buy, generally very large, should be an issue. The profits will be taxed in US as well as India [you can claim relief under DTAA]", "title": "" }, { "docid": "6a43868c11cef3decde5fc0f457434ab", "text": "Hi there. I think China is recommended for premanufactured products given their GDP output. The specific products may exist in the US too. The key is networking. Starting online retail, you are essentially ecommerce and or sales. There may be people seeking sales reps for their products. You should have a specific business plan targetting the niche you plan to sell and cater to. Thomasnet has US manufacturers. You may have to get clever and work out deals selling manufactured goods but with work it can be done. I personally have seen way too many issues result of dealing with imports and know of many rookie mistakes in business where people have gone this route due to price. Sources: MBA, marketing apprentice for multi millionaire, business apprentice working with manufacturing operations director with civil and military experience; former freelance design, project management and product manufacturing experience.", "title": "" }, { "docid": "66b6d7651ba92fdc726761af5e89c6f9", "text": "\"I made an investing mistake many (eight?) years ago. Specifically, I invested a very large sum of money in a certain triple leveraged ETF (the asset has not yet been sold, but the value has decreased to maybe one 8th or 5th of the original amount). I thought the risk involved was the volatility--I didn't realize that due to the nature of the asset the value would be constantly decreasing towards zero! Anyhow, my question is what to do next? I would advise you to sell it ASAP. You didn't mention what ETF it is, but chances are you will continue to lose money. The complicating factor is that I have since moved out of the United States and am living abroad (i.e. Japan). I am permanent resident of my host country, I have a steady salary that is paid by a company incorporated in my host country, and pay taxes to the host government. I file a tax return to the U.S. Government each year, but all my income is excluded so I do not pay any taxes. In this way, I do not think that I can write anything off on my U.S. tax return. Also, I have absolutely no idea if I would be able to write off any losses on my Japanese tax return (I've entrusted all the family tax issues to my wife). Would this be possible? I can't answer this question but you seem to be looking for information on \"\"cross-border tax harvesting\"\". If Google doesn't yield useful results, I'd suggest you talk to an accountant who is familiar with the relevant tax codes. Are there any other available options (that would not involve having to tell my wife about the loss, which would be inevitable if I were to go the tax write-off route in Japan)? This is off topic but you should probably have an honest conversation with your wife regardless. If I continue to hold onto this asset the value will decrease lower and lower. Any suggestions as to what to do? See above: close your position ASAP For more information on the pitfalls of leveraged ETFs (FINRA) What happens if I hold longer than one trading day? While there may be trading and hedging strategies that justify holding these investments longer than a day, buy-and-hold investors with an intermediate or long-term time horizon should carefully consider whether these ETFs are appropriate for their portfolio. As discussed above, because leveraged and inverse ETFs reset each day, their performance can quickly diverge from the performance of the underlying index or benchmark. In other words, it is possible that you could suffer significant losses even if the long-term performance of the index showed a gain.\"", "title": "" } ]	fiqa
263ab34423c54ee1594419eba6d7836f	Is there a debit card that earns miles (1 mile per $1 spent) and doesn't have an annual fee?	[ { "docid": "28aca8fc12242a63427a0c031f083621", "text": "I don't know of any that are comparable to credit cards. There's a reason for that. Debit cards, being newer, have a much lower interchange rate. Since collecting on debt is risky and less predictable, rewards / miles are paid from those interchange fees. This means with a debit card there's less money to pay you with. So what can you do? Assuming your credit isn't terrible, you can just open a credit card account and pay in full for purchases by the grace period. I don't know how all cards work, but my grace period allows me to pay in full by the billing date (roughly a month from purchase) and incur no finance charges. In effect, I get a small 30 day loan with no interest, and a cash back incentive (I dislike miles). You're also less liable for fraud via CC than debit.", "title": "" }, { "docid": "0e93cbdabff605d2c1fe070739704a26", "text": "I have an American Airlines VISA with miles that has no annual fee, but only because I request that they waive the fee each year. Word to the wise - they've never refused.", "title": "" } ]	[ { "docid": "9986ea75e33396169977ca008189726c", "text": "A lot of big companies offer credit cards. And it makes total sense. For example, if you have a Macy's card, you get access to special discounts that you wouldn't normally get. It saves the consumer money and builds loyalty to the brand. Same for Southwest credit cards. It's a completely normal move. EDIT: Also, Uber doesn't actually have to do much - it's the issuing bank that manages the program. Most of the branded credit cards you see are Chase, BTW. Amazon and Southwest are both run by Chase.", "title": "" }, { "docid": "278dfae26b43adafbd6cf6655c324295", "text": "I got a Capital One credit card because they don't charge a fee for transactions in foreign currencies. So I only use it when I travel abroad. At home, I use 3 different credit cards, each offering different types of rewards (cash back on gas, movies, restaurants, online shopping etc).", "title": "" }, { "docid": "5964e038b78de817efa3fe3d15bc7e0b", "text": "You can use the debit card for practically any purchase that you make. You'll have to take the usual precautions and then a few additional ones. Cards make your life really easy and convenient with some basic precautions. All the best for your travel and stay in the USA. My two cents.", "title": "" }, { "docid": "809f3ea330e08069532bab097793e5ca", "text": "\"I'd like to know if there is any reliable research on the subject. Intuitively, this must be true, no? Is it? First, is it even possible to discover the correlation, if one exists? Dave Ramsey is a proponent of \"\"Proven study that shows you will spend 10% more on a credit card than with cash.\"\" Of course, he suggests that the study came from an otherwise reliable source, Dun & Bradstreet. A fellow blogger at Get Rich Slowly researched and found - Nobody I know has been able to track down this mythical Dun and Bradstreet study. Even Dun and Bradstreet themselves have been unable to locate it. GRS reader Nicole (with the assistance of her trusty librarian Wendi) contacted the company and received this response: “After doing some research with D&B, it turns out that someone made up the statement, and also made up the part where D&B actually said that.” In other words, the most cited study is a Myth. In fact, there are studies which do conclude that card users spend more. I think that any study (on anything, not just this topic. Cigarette companies buy studies to show they don't cause cancer, Big Oil pays to disprove global warming, etc.) needs to be viewed with a critical eye. The studies I've seen nearly all contain one of 2 major flaws - My own observation - when I reviewed our budget over the course of a year, some of the largest charges include - I list the above, as these are items whose cost is pretty well fixed. We are not in the habit of \"\"going for a drive,\"\" gas is bought when we need it. All other items I consider fixed, in that the real choice is to pay with the card or check, unlike the items some claim can be inflated. These add to about 80% of the annual card use. I don't see it possible for card use to impact these items, and therefore the \"\"10% more\"\" warning is overreaching. To conclude, I'll concede that even the pay-in-full group might not adhere to the food budget, and grab the $5 brownie near the checkout, or over tip on a restaurant meal. But those situations are not sufficient to assume that a responsible card user comes out behind over the year for having done so. A selection of the Studies I am referencing -\"", "title": "" }, { "docid": "ff658878eb559cffbb618b78cfe1ff60", "text": "http://www.andrewsfcu.org/ is one of the only US financial institutions to issue a low or no annual fee chip and pin visa or mastercard.. Andrews is primarily for civilian employees of the Andrews Air Force Base but is available to members of the American Consumer Council, which offers free membership, see http://www.andrewsfcu.org/page.php?page=330 . The chip and pin card is a visa with $0 annual fee and charges a 1% foreign transaction fee. Getting one is modestly difficult because you have to first join the credit union then apply for the card, then go through underwriting as if it were a personal loan rather than a revolving credit account. Still, for travelers, it is probably worth it.", "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": "fe8cec63df9636d261bc60e06280cf6d", "text": "This only indirectly answer your question, but Schwab investor checking account has no fee, no minimum balance, and will reimburse all ATM fee (inside and outside the US)", "title": "" }, { "docid": "1bff0436c8c540881ce5addcb08ee967", "text": "I don't know of any and it is unlikely that you will be able to find one. Most credit card processors charge a flat fee plus percentage. The flat fee is typically in the 35 cent range making the cost of doing business, in the manner you are suggesting, astronomical. Also what you are suggesting is contrary to best practices as hosting services, and many other industries, offer deep discounts when making a single payment for an extended period of time. This is not very helpful, but I think it is unrealistic to find what you are suggesting.", "title": "" }, { "docid": "6c6e91792fbbfd98238e6a5d560df128", "text": "\"While I think this is generally inadvisable, there are sites and communities dedicated to \"\"points churning\"\" credit card reward programs. In general, no there is no easy way to get cash from a credit card, and receive the spending rewards, and not pay fees well in excess of your rewards value. However, there are people who figure out ways to do this kind of thing. Like buying prepaid Visa cards $500 at a time from drug stores on a 5% bonus rewards month. Or buying rolls of $1 coins from the US treasury with free shipping. The issue is the source of the fees. When you spend money on your card the merchant pays a fee. When you get cash from an ATM not only is there no merchant remitting a fee there is an ATM operator and a network both charging fees.\"", "title": "" }, { "docid": "397050bf496379d0b5e27f6d329f1278", "text": "\"you could get a discover card and then just \"\"freeze\"\" it. you might need to unfreeze it for a few minutes when you sign up for a new service, but it is unlikely an ongoing subscription would process a charge in that window. i believe merchants are charged a small fee for a transaction even if it is declined, so they won't try constantly forever. discover account freeze faq capitalone offers this freeze feature on their \"\"360\"\" debit cards. you can even freeze and unfreeze your card from their mobile app. this feature is becoming more common at small banks and credit unions too. i know of 2 small local banks that offer it. in fact, almost any bank can give you a debit card, then set the daily POS limit to 0$, effectively making it an atm-only card. but you may need to call the bank to get that limit temporarily lifted whenever you want to sign up for a new service. alternatively, jejorda2's suggestion of virtual account numbers is a good idea. several banks (including discover) have discontinued that feature, but i believe citi, and boa still offer them. side notes:\"", "title": "" }, { "docid": "ac33a013f04167de2998295a5bd240ca", "text": "If the card has no annual fee, you can keep it for as long as you like and you will never get charged. I advise you to GoPaperless so you stop getting the $0 bills every month. Many cards have the fee waived for the first year. If you have such a card, you should make sure to cancel it when you stop using it, or when the fee waiver expires.", "title": "" }, { "docid": "d8adc7d4160959f688ae4e377b73b715", "text": "In the case of reward cards, different cards may offer different rewards for different kind of purchases. For example, in the UK, one of the Amex cards offers 1.25% cashback on all purchases, whereas one of the Santander cards offers 3% on fuel, 2% or 1% on certain other transactions, and nothing on others. Of course, you then have to remember to use the right card! Another reason is that a person may use a card for a while, build up a good credit limit, and then move to a different card (perhaps because it has better rewards, or a lower interest rate, etc) without cancelling the first. If it costs nothing to keep the first card, then it can be useful to have it as a spare.", "title": "" }, { "docid": "8d8d1ca1f1ac2f7f965dc501cd5c996e", "text": "My bank charges me on my statement for debit transactions, but rewards me with bogo points when I run transactions as credit. AFAIK, retailers are prevented by contract with VISA et all from recouping the merchant fee from you (instead they can mark up all prices and offer a 'cash discount'), not that you'll be able to convince your vietnamese grocer of this. The difference between debit and credit fees is large enough that even these small tricks by the bank can mean a lot of money for them. Since most retailers accept either, they recruit me into their profit game with carrots and sticks. I've since moved to an actual cash back credit card and haven't regretted it yet.", "title": "" }, { "docid": "ecad50d0648a674b4523a69676b615e9", "text": "credit cards are almost never closed for inactivity. i have had dozens of cards innactive for years on end, and only one was ever closed on me for inactivity. i would bet a single 1$ transaction per calendar year would keep all your cards open. as such, you could forget automating the process and just spend 20 minutes a year making manual 1$ payments (e.g. to your isp, utility company, google play, etc.). alternatively, many charities will let you set up an automatic monthly donation for any amount (e.g. 1$ to wikipedia). or perhaps you could treat yourself to an mp3 once a month (arguably a charitable donation in the age of file sharing). side note: i use both of these strategies to get the 12 debit card transactions per month required by my kasasa checking account.", "title": "" }, { "docid": "6bd0a65a9d93ed7e39c9ce553050c13f", "text": "\"It's more the opposite...using a credit card as a debit card may be treated as a \"\"cash advance,\"\" since money is debited on the spot...so you could be charged a cash advance fee. If you used your debit card as a credit card, there may simply be a balance on the account that needs to be paid off before it begins accruing interest.\"", "title": "" } ]	fiqa
da74c8802aca9af42fb893790a3dbd72	Empirical performance data of ETFs and Mutual Funds tracking identical Indexes?	[ { "docid": "bd36cc84ea10cfdc1920099d015b5085", "text": "Why don't you look at the actual funds and etfs in question rather than seeking a general conclusion about all pairs of funds and etfs? For example, Vanguard's total stock market index fund (VTSAX) and ETF (VTI). Comparing the two on yahoo finance I find no difference over the last 5 years visually. For a different pair of funds you may find something very slightly different. In many cases the index fund and ETF will not have the same benchmark and fees so comparisons get a little more cloudy. I recall a while ago there was an article that was pointing out that at the time emerging market ETF's had higher fees than corresponding index funds. For this reason I think you should examine your question on a case-by-case basis. Index fund and ETF returns are all publicly available so you don't have to guess.", "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": "39039f0f18b9a5f0ebc766f87a502934", "text": "In the past 10 years there have been mutual funds that would act as a single bucket of stocks and bonds. A good example is Fidelity's Four In One. The trade off was a management fee for the fund in exchange for having to manage the portfolio itself and pay separate commissions and fees. These days though it is very simple and pretty cheap to put together a basket of 5-6 ETFs that would represent a balanced portfolio. Whats even more interesting is that large online brokerage houses are starting to offer commission free trading of a number of ETFs, as long as they are not day traded and are held for a period similar to NTF mutual funds. I think you could easily put together a basket of 5-6 ETFs to trade on Fidelity or TD Ameritrade commission free, and one that would represent a nice diversified portfolio. The main advantage is that you are not giving money to the fund manager but rather paying the minimal cost of investing in an index ETF. Overall this can save you an extra .5-1% annually on your portfolio, just in fees. Here are links to commission free ETF trading on Fidelity and TD Ameritrade.", "title": "" }, { "docid": "c0ae68ed525f07cf53970454159f26a8", "text": "More importantly, index funds are denominated in specific currencies. You can't buy or sell an index, so it can be dimensionless. Anything you actually do to track the index involves real amounts of real money.", "title": "" }, { "docid": "13804378135ed6bfb6d6e7517aac9d40", "text": "index ETF tracks indented index (if fund manager spend all money on Premium Pokemon Trading Cards someone must cover resulting losses) Most Index ETF are passively managed. ie a computer algorithm would do automatic trades. The role of fund manager is limited. There are controls adopted by the institution that generally do allow such wide deviations, it would quickly be flagged and reported. Most financial institutions have keyman fraud insurance. fees are not higher that specified in prospectus Most countries have regulation where fees need to be reported and cannot exceed the guideline specified. at least theoretically possible to end with ETF shares that for weeks cannot be sold Yes some ETF's can be illiquid at difficult to sell. Hence its important to invest in ETF that are very liquid.", "title": "" }, { "docid": "12dfd7a4c63537325923b5f65bab573a", "text": "Exchange-traded funds are bought and sold like stocks so you'd be able to place stop orders on them just like you could for individual stocks. For example, SPY would be the ticker for an S & P 500 ETF known as a SPDR. Open-end mutual funds don't have stop orders because of how the buying and selling is done which is on unknown prices and often in fractional shares. For example, the Vanguard 500 Index Investor shares(VFINX) would be an example of an S & P 500 tracker here.", "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": "1d233b4aaff599f1666c92147468e89e", "text": "The mutual fund will price at day's end, while the ETF trades during the day, like a stock. If you decide at 10am, that some event will occur during the day that will send the market up, the ETF is preferable. Aside from that, the expenses are identical, a low .14%. No real difference especially in a Roth.", "title": "" }, { "docid": "a5c828411013510f191bb0f58be880db", "text": "I'm not 100% familiar with the index they're using to measure hedge fund performance, but based on the name alone, comparing market returns to market neutral hedge fund returns seems a bit disingenuous. That doesn't mean the article is wrong, and they have a point about the democratization of data, but still.", "title": "" }, { "docid": "91ac8519ecdfef7fe122c4fde90a549d", "text": "\"Note that an index fund may not be able to precisely mirror the index it's tracking. If enough many people invest enough money into funds based on that index, there may not always be sufficient shares available of every stock included in the index for the fund to both accept additional investment and track the index precisely. This is one of the places where the details of one index fund may differ from another even when they're following the same index. IDEALLY they ought to deliver the same returns, but in practical terms they're going to diverge a bit. (Personally, as long as I'm getting \"\"market rate of return\"\" or better on average across all my funds, at a risk I'm comfortable with, I honestly don't care enough to try to optimize it further. Pick a distribution based on some stochastic modelling tools, rebalance periodically to maintain that distribution, and otherwise ignore it. That's very much to the taste of someone like me who wants the savings to work for him rather than vice versa.)\"", "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": "e3ad56de12a1e57eee094f285039e940", "text": "\"I hope a wall of text with citations qualifies as \"\"relatively easy.\"\" Many of these studies are worth quoting at length. Long story short, a great deal of research has found that actively-managed funds underperform market indexes and passively-managed funds because of their high turnover and higher fees, among other factors. Longer answer: Chris is right in stating that survivorship bias presents a problem for such research; however, there are several academic papers that address the survivorship problem, as well as the wider subject of active vs. passive performance. I'll try to provide a brief summary of some of the relevant literature. The seminal paper that started the debate is Michael Jensen's 1968 paper titled \"\"The Performance of Mutual Funds in the Period 1945-1964\"\". This is the paper where Jensen's alpha, the ubiquitous measure of the performance of mutual fund managers, was first defined. Using a dataset of 115 mutual fund managers, Jensen finds that The evidence on mutual fund performance indicates not only that these 115 mutual funds were on average not able to predict security prices well enough to outperform a buy-the-market-and-hold policy, but also that there is very little evidence that any individual fund was able to do significantly better than that which we expected from mere random chance. Although this paper doesn't address problems of survivorship, it's notable because, among other points, it found that managers who actively picked stocks performed worse even when fund expenses were ignored. Since actively-managed funds tend to have higher expenses than passive funds, the actual picture looks even worse for actively managed funds. A more recent paper on the subject, which draws similar conclusions, is Martin Gruber's 1996 paper \"\"Another puzzle: The growth in actively managed mutual funds\"\". Gruber calls it \"\"a puzzle\"\" that investors still invest in actively-managed funds, given that their performance on average has been inferior to that of index funds. He addresses survivorship bias by tracking funds across the entire sample, including through mergers. Since most mutual funds that disappear are merged into existing funds, he assumes that investors in a fund that disappear choose to continue investing their money in the fund that resulted from the merger. Using this assumption and standard measures of mutual fund performance, Gruber finds that mutual funds underperform an appropriately weighted average of the indices by about 65 basis points per year. Expense ratios for my sample averaged 113 basis points a year. These numbers suggest that active management adds value, but that mutual funds charge the investor more than the value added. Another nice paper is Mark Carhart's 1997 paper \"\"On persistence in mutual fund performance\"\" uses a sample free of survivorship bias because it includes \"\"all known equity funds over this period.\"\" It's worth quoting parts of this paper in full: I demonstrate that expenses have at least a one-for-one negative impact on fund performance, and that turnover also negatively impacts performance. ... Trading reduces performance by approximately 0.95% of the trade's market value. In reference to expense ratios and other fees, Carhart finds that The investment costs of expense ratios, transaction costs, and load fees all have a direct, negative impact on performance. The study also finds that funds with abnormally high returns last year usually have higher-than-expected returns next year, but not in the following years, because of momentum effects. Lest you think the news is all bad, Russ Wermer's 2000 study \"\"Mutual fund performance: An empirical decomposition into stock‐picking talent, style, transactions costs, and expenses\"\" provides an interesting result. He finds that many actively-managed mutual funds hold stocks that outperform the market, even though the net return of the funds themselves underperforms passive funds and the market itself. On a net-return level, the funds underperform broad market indexes by one percent a year. Of the 2.3% difference between the returns on stock holdings and the net returns of the funds, 0.7% per year is due to the lower average returns of the nonstock holdings of the funds during the period (relative to stocks). The remaining 1.6% per year is split almost evenly between the expense ratios and the transaction costs of the funds. The final paper I'll cite is a 2008 paper by Fama and French (of the Fama-French model covered in business schools) titled, appropriately, \"\"Mutual Fund Performance\"\". The paper is pretty technical, and somewhat above my level at this time of night, but the authors state one of their conclusions bluntly quite early on: After costs (that is, in terms of net returns to investors) active investment is a negative sum game. Emphasis mine. In short, expense ratios, transaction costs, and other fees quickly diminish the returns to active investment. They find that The [value-weight] portfolio of mutual funds that invest primarily in U.S. equities is close to the market portfolio, and estimated before fees and expenses, its alpha is close to zero. Since the [value-weight] portfolio of funds produces an α close to zero in gross returns, the alpha estimated on the net returns to investors is negative by about the amount of fees and expenses. This implies that the higher the fees, the farther alpha decreases below zero. Since actively-managed mutual funds tend to have higher expense ratios than passively-managed index funds, it's safe to say that their net return to the investor is worse than a market index itself. I don't know of any free datasets that would allow you to research this, but one highly-regarded commercial dataset is the CRSP Survivor-Bias-Free US Mutual Fund Database from the Center for Research in Security Prices at the University of Chicago. In financial research, CRSP is one of the \"\"gold standards\"\" for historical market data, so if you can access that data (perhaps for a firm or academic institution, if you're affiliated with one that has access), it's one way you could run some numbers yourself.\"", "title": "" }, { "docid": "35889a5546d6239548ae4eb8634a8426", "text": "The way it is handled with ETF's is that someone has to gather a block of units and redeem them with the fund. So, with the mutual fund you redeem your unit directly with the fund, always, you never sell to another player. With the ETF - its the opposite, you sell to another player. Once a player has a large chunk of units - he can go to the fund and redeem them. These are very specific players (investment banks), not individual investors.", "title": "" }, { "docid": "950291af0e37e82b04cc1de7e2483eec", "text": "\"Sure the LBTA has outperformed LVOL recently but they are very similar (Just look at their underlying indices going back to 2007) - they underperform in good markets and tend to outperform more than they underperformed in down markets. The article should be saying something more like: \"\"Recent outperformance of LBTA is due to sector specific bets of the ETF\"\" And the article fails to point out that LBTA is so low volume that it even has trouble tracking its underlying index on a day to day basis. (LVOL is also very low volume, but it's still significantly better than LBTA).\"", "title": "" }, { "docid": "642b86f98a538677ffa13426a8d71943", "text": "Is it POSSIBLE? Of course. I don't even need to do any research to prove that. Just some mathematical reasoning: Take the S&P 500. Find the performance of each stock in that list over whatever time period you want to use for your experiment. Now select some number of the best-performing stocks from the list -- any number less than 500. By definition, the X best must be better than or equal to the average. Assuming all the stocks on the S&P did not have EXACTLY the same performance, these 10 must be better than average. You now have a diversified portfolio that performed better than the S&P 500 index fund. Of course as they always say in a prospectus, past performance is not a guarantee of future performance. It's certainly possible to do. The question is, if YOU selected the stocks making up a diversified portfolio, would your selections do better than an index fund?", "title": "" }, { "docid": "ea024c1c19d8d8a040dd4a8b2cba45b4", "text": "The Japanese stock market offers a wide selection of popular ETFs tracking the various indices and sub-indices of the Tokyo Stock Exchange. See this page from the Japan Exchange Group site for a detailed listing of the ETFs being offered on the Tokyo exchange. As you have suggested, one would expect that Japanese investors would be reluctant to track the local market indices because of the relatively poor performance of the Japanese markets over the last couple of decades. However, this does not appear to be the case. In fact, there seems to be a heavy bias towards Tokyo indices as measured by the NAV/Market Cap of listed ETFs. The main Tokyo indices - the broad TOPIX and the large cap Nikkei - dominate investor choice. The big five ETFs tracking the Nikkei 225 have a total net asset value of 8.5Trillion Yen (72Billion USD), while the big four ETFs tracking the TOPIX have a total net asset value of 8.0Trillion Yen (68Billion USD). Compare this to the small net asset values of those Tokyo listed ETFs tracking the S&P500 or the EURO STOXX 50. For example, the largest S&P500 tracker is the Nikko Asset Management S&P500 ETF with net asset value of just 67Million USD and almost zero liquidity. If I remember my stereotypes correctly, it is the Japanese housewife that controls the household budget and investment decisions, and the Japanese housewife is famously conservative and patriotic with their investment choices. Japanese government bonds have yielded next to nothing for as long as I can remember, yet they remain the first choice amongst housewives. The 1.3% yield on a Nikkei 225 ETF looks positively generous by comparison and so will carry some temptations.", "title": "" } ]	fiqa
ca13c4db6eb1733982d923d5d31b1f51	Should I take out a loan vs pay off with mother's help?	[ { "docid": "0e6096c9a5cc9f93021f8cfe6fc43667", "text": "Is it a gift or a loan? Either way, ask the same lawyer who will do the closing to record a mortgage on the property, your mother holds it. You are required to pay her market interest, 4% or so should pass IRS scrutiny. If it's truly a loan, decide on the payoff time and calculate the payments, she'll have a bit of interest income which will be taxable to her, and you might have a write-off if you itemize, which is unlikely. If it's a gift, since you mentioned gift concerns, she can forgive the interest, and principal each year to total $13K, or file the popular Form 709 to declare the whole gift against her $1M unified lifetime gift exclusion (which negates the whole mortgage/lien thing)", "title": "" } ]	[ { "docid": "1dd3cca05f204f8c44dab143bea54633", "text": "Transfer of Money from you to Your Mother is Tax Free. i.e. This will not be considered as income for your mother as there is NO work done. This would be considered as Gift and would fall under Gift Tax. As per Gift Tax you can give unlimited amounts to close relative. Mother is considered as close relative. The tax rule is same whichever option you follow. You would need to maintain proper paperwork, should there be any query from Income Tax department. Any interest / income your mother generates on this will be her taxable income. You have also mentioned that you are repaying some loan for your relative, again the paper work should be very clear when your mother is transfering the money to your relative. The interest you pay back maybe taxable to your relative depending on paperwork. Edit: Elobrate OP's edit to question From your point of view, once you have given the funds to your Mother and call it gift; it ends. What your mother does with the money invests, spends, etc is not your liability. However if your mother is tranferring money to person's who are not defined as relatives under Gift Law or the interest your relatives get are all taxable events to them.", "title": "" }, { "docid": "086c40bd3fcff9179d9481f38223059b", "text": "The crucial question not addressed by other answers is your ability to repay the debt. Borrowing is always about leverage, and leverage is always about risk. In the home improvement loan case, default comes with dire consequences-- to extinguish the debt you might have to sell your home. With a stable job, reliable income, and sufficient cash flow (and, of course, comfort that the project will yield benefits you're happy to pay for), then the clear answer is, go ahead and borrow. But if you work in a highly cyclical industry, have very little cash saved, or for whatever other reason are uncertain about your future ability to pay, then don't borrow. Save until you are more comfortable you can handle the loan. That doesn't necessarily mean save ALL the money; just save enough that you are highly confident in your ability to pay whatever you borrow.", "title": "" }, { "docid": "8a3ebfa6c633c4958363319222831edb", "text": "\"Consider the \"\"opportunity cost\"\" of the extra repayment on a 15 year loan. If you owe money at 30% p.a. and money at 4% p.a. then it is a no brainer that the 30% loan gets paid down first. Consider too that if the mortgage is not tax deductable and you pay income tax, that you do not pay tax on money you \"\"save\"\". (i.e. in the extreme $1 saved is $2 earned). Forward thinking is key, if you are paying for someone's college now, then you would want to pay out of an education plan for which contributions are tax deductable, money in, money out. In my country most mortgages, be they 15,25,30 years tend to last 6-8 years for the lender. People move or flip or re-finance. I would take the 15 for the interest rate but only if I could sustain the payments without hardship. Maybe a more modest home ? If you cannot afford the higher repayments you are probably sailing a bit close to the wind anyway. Another thing to consider is that tax benefits can be altered with the stroke of a pen, but you may still have to meet repayments.\"", "title": "" }, { "docid": "f9ba2fbf8bc4ade401666b89c7123cbf", "text": "\"First of all, I'm happy that the medical treatments were successful. I can't even imagine what you were going through. However, you are now faced with a not-so-uncommon reality that many households face. Here's some other options you might not have thought of: I would avoid adding more debt if at all possible. I would first focus on the the cost side. With a good income you can also squeeze every last dollar out of your budget to send them to school. I agree with your dislike of parent loans for the same reasons, plus they don't encourage cost savings and there's no asset to \"\"give back\"\" if school doesn't work out (roughly half of all students that start college don't graduate) I would also avoid borrowing more than 80% of your home's value to avoid PMI or higher loan rates. You also say that you can pay off the HELOC in 5 years - why can you do that but not cash flow the college? Also note that a second mortgage may be worse that a HELOC - the fees will be higher, and you still won't be able to borrow more that what the house is worth.\"", "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": "40c0761122d6cbae95253fc418b16bb6", "text": "It is pretty easy to setup a spreadsheet for calculating interest payments and remaining balance. Do a quick search online. You may want to put it in something like Google Docs, where brother can view the status, but only you can edit it. When you get a payment, a portion goes to interest and another to principle. The formulas will do the work for you. However, I feel that there is a bigger issue. The math may seem like a good deal for the both of you, but I would be very hesitant to loan a family member money. What if he does not pay? What if he is late with a payment and goes on a vacation himself? What if his significant other resents the payment that you collect which precludes her from buying a new TV, etc... People come to hate/resent big corporations that they have to make payments. How much more so one that has a face....that comes over and eats? While this loan is outstanding holidays may never be the same. Is the loan a real need? Are you in a position to give them the money? You may want to consider the latter. Is there a reason he can't just borrow the money from the bank?", "title": "" }, { "docid": "9182607a4ada87e464e537e88a5480b0", "text": "Forgive me as I do not know much about your fine country, but I do know one thing. You can make 5% risk free guaranteed. How, from your link: If you make a voluntary repayment of $500 or more, you will receive a bonus of 5 per cent. This means your account will be credited with an additional 5 per cent of the value of your payment. I'd take 20.900 of that amount saved and pay off her loan tomorrow and increase my net worth by 22.000. I'd also do the same thing for your loan. In fact in someways it is more important to pay off your loan first. As I understand it, you will eventually have to pay your loan back once your income rises above a threshold. Psychologically you make attempt to retard your future income in order to avoid payback. Those decisions may not be made overtly but it is likely they will be made. So by the end of the day (or as soon as possible), I'd have a bank balance of 113,900 and no student loan debt. This amounts to a net increase in net worth of 1900. It is a great, safe, first investment.", "title": "" }, { "docid": "d9398427d81cedd786daf86c52a4d027", "text": "The only time borrowing instead of paying from cash would make sense is if you have (or think you might run into) opportunities to put that cash to work for you earning more than the interest you're paying. For instance, you might run into investment opportunities where having the cash to jump in would let you get into them. Beyond something like this, it'd be foolish to pay interest just so you can have a bigger bank balance and feel like you're somehow better off! I hope this helps. Good luck!", "title": "" }, { "docid": "9c74fb51ad148293159d665e83931a00", "text": "\"He's paying the interest and you're paying the principal. If you're making minimum monthly payments, you'll still be doing the same thing 25-30 years from now. I think Parker's advice was very, very good, but I'd like to add to it a little of my own. Whatever dollar amount your son is sending to you as payment, encourage him to continue doing that. Only instead of paying you, have him put that money into a savings plan of some kind. You mentioned that he's struggling now, yet able to come up with approximately (my best guess) $200/mo. I guarantee you that if he puts that $200/mo back into his pocket, he'll still be struggling every month yet have nothing to show for it. My suggestion changes nothing in his daily life, yet gives him $2400 at the end of every year. I was in a somewhat similiar situation as your son, only to the tune of $13,000. About 20 years ago, I got a loan and bought a new truck in which to use to go back and forth to work every day. The first 5 months the payments to the bank went as planned. Then my wife announces that \"\"we're\"\" pregnant. So my parents figured it would be best to just pay off my loan to the bank, avoiding any further interest charges, and take that truck payment and put it away for a rainy day. At 33 y/o, with my first child on the way, I finally started saving some of my money. It was good advice on their part because the rainy days came! They never asked me to pay them back, however I did offer. I've been tucking away $300-400/mo in the bank every month since then because I just got into the habit. Good thing I did too. In the past 10 years I've had to bury both of my parents, one sister and two wives and I'll tell ya, one thing that was comforting was the fact that I had the money. The little truck I bought 20 years ago is now my son's. It has around 260,000 miles on it now. When he trades it in for a newer vehicle, I will probably loan him the money and have him make payments to me rather than the bank. I, too, am not one to pay interest if I can help it. If he defaults, he's my son. I just won't buy him another vehicle! Or maybe he'll get into the same habit of saving money the same way I did. Like JohnFx said, money loaned to family should be regarded as a gift, otherwise you'll end up losing your money AND your family member! Hope some of this helps you make your decision.\"", "title": "" }, { "docid": "2ca37ccaeb56e7276aa66a6183d66820", "text": "\"I really don't feel co-signing this loan is in the best interests of either of us. Lets talk about the amount of money you need and perhaps I can assist you in another way. I would be honest and tell them it isn't a good deal for anybody, especially not me. I would then offer an alternative \"\"loan\"\" of some amount of money to help them get financing on their own. The key here is the \"\"loan\"\" I offer is really a gift and should it ever be returned I would be floored and overjoyed. I wouldn't give more than I can afford to not have. Part of why I'd be honest to spread the good word about responsible money handling. Co-signed loans (and many loans themselves) probably aren't good financial policy if not a life & death or emergency situation. If they get mad at me it won't matter too much because they are family and that won't change.\"", "title": "" }, { "docid": "a83a30574625b35fba23c608b1b6053c", "text": "I concur with the other answers about not mixing family and money: the one whose loans are paid off second will be taking the credit risk of the other not paying/being able to pay. There may also be tax implications. That said, if you do still want to do this, I think there's a fairly straightforward way to account for the payments. With your scenario, your brother should make you a personal loan at some interest rate inbetween 5% and 10%. That loan would be tracked independently of the actual student loans. Any money that your brother transfers to you to pay off your loans, add to that personal loan, and later on once your loans are paid off you start repaying the loan to him and he uses the proceeds for his own loans. The interest rate will determine how the benefit of paying off the 10% loans is shared: if the rate is set at 10% then your brother will get all the benefit, if 5% you will get all the benefit, and 7.5% would roughly share it out. This means that you can still manage your own student loans separately. Your brother can choose how little or much to commit to the snowball rather than his own loans (of course he should first make the minimum payments on his own loans). Anything he does loan you benefits you both if we ignore the credit and tax issues - he gets more than the 5% interest on his own loans, and you pay less than the 10% interest on your loans. You'll need to track the payments each way on this personal loan and apply interest to it every so often, I'd suggest monthly (beware that the monthly equivalent of 5% annual interest is not 5%/12, because of compounding).", "title": "" }, { "docid": "de786917a9584835bf7c24d2ad3ed4be", "text": "\"I did a rough model and in terms of total $$ paid (interest + penalty - alternative investment income) both options are almost the same with the \"\"paying it all upfront\"\" being perhaps a $300 or so better ($9200 vs $8900) However, that doesn't factor in inflation or tax considerations. Personally I'd go with the \"\"no-penalty\"\" scenario since you have more flexibility and can adjust along the way if anything else comes up in the meantime.\"", "title": "" }, { "docid": "f70d9d96adc30664e67e40812f60cbfd", "text": "I would suggest talking to your parents about potentially co-signing on the loan with you. Just make sure that you are the primary holder of the loan. Sure, there is some risk for your parents, but they know you better than anyone so let them make the decision if they want to help you or not. If for some reason they can't help you, such as they've declared bankruptcy, then following the other answers' advice is the way to go.", "title": "" }, { "docid": "b49c1e70130f64a08cadd1ff68d20b93", "text": "So one approach would be purely mathematical: look at whichever has the higher interest rate and pay it first. Another approach is to ignore the math (since the interest savings difference between a mortgage and student loan is likely small anyways) and think about what your goals are. Do you like having a student loan payment? Would you prefer to get rid of it as quickly as possible? How would it feel to cut the balance in HALF in one shot? If it were me, I would pay the student loan as fast as possible. Student loans are not cancellable or bankruptable, and once you get it paid off you can put that payment amount toward your house to get it paid off.", "title": "" }, { "docid": "b2e2719f1083db1bd241372fc8bb8636", "text": "First off, this is a post for /r/personalfinance. Second off, if you want to think of this like an accountant/financier, those are the bank's 10233 dollars, not your's, and you are paying them 6% to keep that money. If you are confident that you are going to make more than 6% interest on any investments you make with that money, it makes sense to do so, although your return will be 6% less in reality. You also assume the risk of losing money on the investment and not having enough money to repay your loans. tl;dr Pay off the loan.", "title": "" } ]	fiqa
c215b171164bf24e628c77ca23f843c4	Pay down the student loan, or buy the car with cash?	[ { "docid": "da02720a8b9ffe0e17799b5fe72029d6", "text": "Here's another way to look at this that might make the decision easier: Looking at it this way you can turn this into a financial arbitrage opportunity, returning 2.5% compared to paying cash for the vehicle and carrying the student loan. Of course you need to take other factors into account as well, such as your need for liquidity and credit. I hope this helps!", "title": "" }, { "docid": "907ebd1d1b30cca0aff5ac675d24d1cd", "text": "To directly answer your question, the best choice is to pay cash and place the rest on your student loan. This is saving you from paying more interest. To offer some advise, consider purchasing a cheaper car to place more money towards your student loan debt. This will be the best financial decision in the long-term. I suspect the reason you are considering financing this vehicle is that the cash payment feels like a lot. Trust your instinct here. This vehicle sounds like large splurge considering your current debt, and your gut is telling you as much. Be patient. Use your liquid funds to get a more affordable vehicle and attack the debt. That is setting yourself up for financial success.", "title": "" } ]	[ { "docid": "7d7947f59d989822b8d8222238a55e55", "text": "Without knowing the terms of the company leased car, it's hard to know if that would be preferable to purchasing a car yourself. So I'll concentrate on the two purchase options - getting a loan or paying in full from savings. If the goal is simply to minimize the amount paid for this car, then paying the full cost up-front is best, because it avoids the financing and interest charges associated with a loan. However, the money you would pay for this car would come out of somewhere (your savings). If your savings were in an investment earning a risk-adjusted return rate of, say, 5% APY and the loan cost 1% APY, you'd have more money in the long run by keeping as much money in your savings as possible, and paying the loan as slowly as possible, because the return rate on your savings is higher. Those numbers are theoretical, of course. You have to make a decision based on your expectation of the performance of your investments, and on the cost of the loan. But depending on your risk tolerance and the loan terms available to you, a loan may well make sense. This is especially true when loans costs are subsidized by manufacturers, who often offer favorable financing on new cars to drive demand. But even bank loans on cars can be pretty inexpensive because the car is a form of collateral with predictable future value. And finally, you should consider tax treatment -- not usually a consideration in purchases of cars by consumers in the US, but can vary due to business use and certainly may be different in India. See also: How smart is it to really be 100% debt free?", "title": "" }, { "docid": "22f8bcf663f42ed5f126b1e447b84980", "text": "\"There are a lot of things that go into your credit score, but the following steps are core to building it: Now, in your case, you obviously have some flexibility in your monthly budget since you're considering paying down your college loan faster. You have to weigh whether it would be better to pay off the loan that much faster, or just save the money towards buying the car. If you can pile up enough cash to buy the car (and still leave yourself an emergency fund) it would be better to buy the car than add another interest payment. As other answers have noted, you don't want to get in a situation where you have no cash for \"\"unexpected events\"\". Some links of interest:\"", "title": "" }, { "docid": "582b9c82eec0476683fba7823cf950ac", "text": "\"Short answer: If you bought the car -- as opposed to leasing it -- there is no one to \"\"turn it in\"\" to. The reality of cars and car loans is this: The value of a car tends to fall rapidly the first couple of years, then more slowly after that. Like it might lose $2000 the first year, $1000 the second, $500 the third, etc. What you owe on a loan falls slowly at first, because a lot of your payment is going to interest, but then as time goes on you pay off the loan faster and faster. So you may pay off $1000 the first year, $1100 the second, etc. (I'm just making up numbers, depends on the value of the car, and the term and interest rate of the loan, but that's the general idea.) Combining these two things means that in the first few years after you buy a car, if you had a small or no down payment, you might well owe more on the car than it is worth. That's just how the numbers work out. If you keep the car long enough, eventually you hit a point where it is worth more than you owe. Keep it until you've paid off the loan and you owe $0 but the car is still worth SOMETHING, exactly how much depending on its condition and other factors. If you just use the car and pay off the loan, i.e. if you don't sell the car or refinance the loan or some such, then this doesn't matter very much. You make your loan payments, and you have use of the car. What difference does the book value of the car at any given moment matter to you? If the idea of owing more than the car is worth bothers you in principle, then in the future you could make a larger down payment. Or make extra payments on the loan the first couple of years to knock the principle down faster. That's about the only things you can do. Well, you could buy with cash so you owe zero and the car is always worth more than you owe. But given that you are where you are: If you just keep the car and keep driving it and keep paying the loan, then you are exactly where you thought you would be when you bought the car, right? I mean, the day you bought the car, you presumably weren't thinking that at some future date you could refinance at a lower rate. How would you know? So I think the easy answer is: Don't sweat it. Just enjoy the car and pay your bills.\"", "title": "" }, { "docid": "cd7306a60bf14d01085ce39d5567c46d", "text": "Two adages come to mind. Never finance a depreciating asset. If you can't pay cash for a car, you can't afford it. If you decide you can finance at a low rate and invest at a higher one, you're leveraging your capital. The risk here is that your investment drops in value, or your cash flow stops and you are unable to continue payments and have to sell the car, or surrender it. There are fewer risks if you buy the car outright. There is one cost that is not considered though. Opportunity cost. Since you've declared transportation necessary, I'd say that opportunity cost is worth the lower risk, assuming you have enough cash left after buying a car to fund your emergency fund. Which brings me to my final point. Be sure to buy a quality used car, not a new one. Your emergency fund should be able to replace the car completely, in the case of a total loss where you are at fault and the loss is not covered by insurance. TLDR: My opinion is that it would be better to pay for a quality, efficient, basic transportation car up front than to take on a debt.", "title": "" }, { "docid": "151409bd98f97fac15cdbd4298f7cc45", "text": "At minimum, put down the sale price less what insurance would pay if you got in an accident when driving home, OR purchase gap insurance. This auto loan calculator is fun to play around with. The larger the down payment, the smaller your monthly payments will be. Don't forget to budget insurance and gas! Insurance on a car you make payments on is more expensive. http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx A buddy of mine had a string of bad luck and totaled his car a few months after the date of purchase. He learned what it meant to be 'underwater', insurance paid him a few thousand less than the value of his loan. What's worse than having no car, having no car and a loan!", "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": "f1ebfd79bc9d4bef340a0a0db7ad909b", "text": "You are currently $30k in debt. I realize it is tempting to purchase a new car with your new job, but increasing your debt right now is heading in the wrong direction. Adding a new monthly payment into your budget would be a mistake, in my opinion. Here is what I would suggest. Since you have $7k in the bank, spend up to $6k on a nice used car. This will keep $1k in the bank for emergencies, and give you transportation without adding debt and a monthly payment. Then you can focus on knocking out the student loans. Won't it be nice when those student loans are gone? By not going further into debt, you will be much closer to that day. New cars are a luxury that you aren't in a position to splurge on yet.", "title": "" }, { "docid": "549024c7f22f60b5b0b2b65245f209a4", "text": "As the other answers indicate, if you look only at the clear mathematical formulas regarding your debts and their interest rates, then you'll see that it's better (less expensive) to pay off your student debt first. However, you must also take into account the value of your car, as it is an asset. The older your car gets, the less it's worth. The more your car gets used and worn out, the less it's worth. Cars depreciate at about 15% per year on average. However, you're continuing to pay the same amount of money to keep a decreasingly valuable asset. Now, you also have to include the fact that you may be required to carry full-coverage car insurance, versus liability insurance. This can represent an increase in spending if you'd prefer to have liability only. With insurance in the picture, you should also be thinking about the possibility that something could happen to your vehicle that causes it to be worth less than you owe, or just worthless. If such an event happens, then you may have more difficulty acquiring a replacement vehicle. I, personally, don't find the increase in total interest paid on student loans to offset the other consideration regarding the value of a car. I'm in a similar situation as you (except your values are all about double what mine are). The peace of mind I gain from being able to pay off the car more quickly, and use that money towards loans or whatever I want, is worth the interest I'll earn by not putting that money into the student loans instead. I also prefer the idea of being able to more easily use my vehicle as a trade in, in case I need to get a different vehicle to better suit my family size.", "title": "" }, { "docid": "1dcfca5dc125aa1279c8d3034291cb9f", "text": "One additional reason to pay with cash rather than financing is that you will be able to completely shut down the dealership from haggling over finance terms and get right to the point of haggling over the cost of the car (which you should always do).", "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": "bae9284c2bfd4171dac291ae6829959d", "text": "Would you borrow money at 3% just to leave it in a savings account? That's effectively what you're doing by not paying of your student loans. I would pay of all of the student loans, and consider putting a little toward the car loan. If you do run into an emergency you still have your $2K/month to help build your savings back up.", "title": "" }, { "docid": "9bcc0c9036c690555368b96512ef7ed8", "text": "\"A Tweep friend asked me a similar question. In her case it was in the larger context of a marriage and house purchase. In reply I wrote a detail article Student Loans and Your First Mortgage. The loan payment easily fit between the generally accepted qualifying debt ratios, 28% for house/36 for all debt. If the loan payment has no effect on the mortgage one qualifies for, that's one thing, but taking say $20K to pay it off will impact the house you can buy. For a 20% down purchase, this multiplies up to $100k less house. Or worse, a lower down payment percent then requiring PMI. Clearly, I had a specific situation to address, which ultimately becomes part of the list for \"\"pay off student loan? Pro / Con\"\" Absent the scenario I offered, I'd line up debt, highest to lowest rate (tax adjusted of course) and hack away at it all. It's part of the big picture like any other debt, save for the cases where it can be cancelled. Personal finance is exactly that, personal. Advisors (the good ones) make their money by looking carefully at the big picture and not offering a cookie-cutter approach.\"", "title": "" }, { "docid": "2d1f550144d06e304037346ce25ed698", "text": "I might be missing something, but I always understood that leasing is about managing cash-flow in a business. You have a fixed monthly out-going as opposed to an up-front payment. My accountant (here in Germany) recommended: pay cash, take a loan (often the manufactures offer good rates) or lease - in that order. The leasing company has to raise the cash from somewhere and they don't want to make a loss on the deal. They will probably know better than I how to manage that and will therefore be calculating in the projected resale value at the end of the leasing period. I can't see how an electric car would make any difference here. These people are probably better informed about the resale value of any type of car than I am. My feeling is to buy using a loan from the manufacturer. The rates are often good and I have also got good deals on insurance as a part of that package. Here in Germany the sales tax (VAT) can be immediately claimed back in full when the loan deal is signed.", "title": "" }, { "docid": "584d3a1d780d21200d209d91a428d8b4", "text": "Cash price is $22,500. Financed, it's the same thing (0% interest) but you pay a $1500 fee. 1500/22500 = 6.6%. Basically the APR for your loan is 1.1% per year but you are paying it all upfront. Opportunity cost: If you take the $22,500 you plan to pay for the car and invested it, could you earn more than the $1500 interest on the car loan? According to google, as of today you can get 1 year CD @ 1.25% so yes. It's likely that interest rates will be going up in medium term so you can potentially earn even more. Insurance cost: If you finance you'll have to get comprehensive insurance which could be costly. However, if you are planning to get it anyway (it's a brand new car after all), that's a wash. Which brings me to my main point: Why do you have $90k in a savings account? Even if you are planning to buy a house you should have that money invested in liquid assets earning you interest. Conclusion: Take the cheap money while it's available. You never know when interest rates will go up again.", "title": "" }, { "docid": "e346a7e245bbe83d9c2932a8ed22b985", "text": "Here is a simple way to analyze the situation. Go to your bank or credit union website and use their loan calculator with their current real interest rates and down payment requirements. Enter the rate, and number of years. Enter different values for the loan amount to get the monthly payment to the level you want ($400). Today for my credit union, the max loan would be about $9,500. Keep in mind there may be taxes, registration fees, and down payment on top of this. Jump ahead two years. The loan is paid off, the car is owned free and clear. You will be able to sell it and get some money in your pocket. If you go for a longer term loan to keep the payments under your goal the issue is that in two years you might be upside down on the loan. The car may be worth less than the remaining balance on the loan. Your equity would be negative.", "title": "" } ]	fiqa
9b27c3cd9b4e2f496d5c10ab9f470440	F-1 Visa expired - Unable to repay private student loan. What to do?	[ { "docid": "29b9d955d1049837a186569160aa9467", "text": "I would contact your loan servicing company explain the situation and see if you can renegotiate terms. They may be able to drop the interest rate or lengthen the schedule to reduce the payment amount. I wouldn't default on the loan as that would likely hinder coming to/working in the US in the future. Not knowing your financial situation or country, could you attempt to obtain financing in your own country in order to pay off the US based loan? I would at least attempt to make some sort of payment while you attempt renegotiation, refinancing or pursue a job in the US, even if it technically puts or keeps you in default of the loan. Making any payment at least shows the willingness to pay back the loan, and you're not intentionally defaulting on your obligation.", "title": "" }, { "docid": "a4db30f5527ac491782383a88de3bb97", "text": "As an international student, the tuition is sky high. Typically, most students take loans for Education and start paying it back once they get a job. If you have exhausted your OPT period and have not got H1B, your options are either to go for further education(Hint: Phd), you can hope to cover living expense by part-time on campus job. This will give you additional time to look for a job and try for H1B again!", "title": "" } ]	[ { "docid": "89435a96181136431689538c7ba0448b", "text": "\"The thing to recall here is that auto-pay is a convenience, not a guarantee. Auto-pay withdrawals, notices that a bill is due, all of these are niceties that the lender uses to try to make sure you consistently pay your bill on time, as all businesses enjoy steady cash flows. Now, what all of these \"\"quality of life\"\" features don't do is mitigate your responsibility, as outlined when you first took out the loan, to pay it back in a timely manner and according to the terms and conditions of the loan. If your original contract for the loan states you shall make \"\"a payment of $X.XX each calendar month\"\", then you are required to make that payment one way or another. If auto-pay fails, you are still obligated to monitor that and correct the payment to ensure you meet your contractual obligation. It's less than pleasant that they didn't notify you, but you were already aware you had an obligation to pay back the loan, and knew what the terms of the loan were. Any forgiveness of interest or penalties for late fees is entirely up to the CSR and the company's internal policies, not the law.\"", "title": "" }, { "docid": "cbd9dfe952f74b25dbcfbe52b673e532", "text": "\"A day or so later I get an email from the mattress company where the rep informs me that they will need to issue me a paper check for the full amount and that I would have to contact Affirm to stop charging me. To which I rapidly answered \"\"Please confirm that with Affirm prior to mailing anything out. On my end the loan was cancelled.\"\" To which the rep replied \"\"confirmed. It has been cancelled.\"\" I think your communication could have been more explicit mentioning that not only was the loan cancelled, you got your initial payments. You have not paid for the mattress. The refund if any should go to Affirm. The Rep has only confirmed that loan has been cancelled. at what point, if any, am i free to use this money? I was planning to just let it sit there until the shoe drops and just returning. But for how long is too long? Sooner or later the error would get realized and you would have to pay this back.\"", "title": "" }, { "docid": "0a49390557b893a6699e8fafbf22181f", "text": "Your wife doesn't need to file a 2014 tax return because she's a nonresident and she didn't have any U.S. income. Her visa is irrelevant; it only matters what her status was (if she was in the U.S., but she wasn't) and if she had U.S. income. Your child doesn't need to file a tax return because she didn't have any income. There's a certain income threshold below which she doesn't have to file. Children generally never file their own tax returns. I don't know who told you otherwise. You may have to file if you had income (maybe including fellowship income and stuff like that) in the U.S. during the year? Did you? If you didn't then you probably don't need to file a tax return. Also, you said you're nonresident for the year. Are you sure about that? Students are generally nonresident for the first 5 calendar years, and resident thereafter. So if you came in 2009 or before, you would be resident for all of 2014; but if you came in 2010 or after, you would be nonresident for all of 2014. If you were in the first 5 calendar years of being a student, you also need to file Form 8843 regardless of whether you need to file a tax return. Nonresidents generally can't claim dependents. Residents can, however. A dependent will provide you with an exemption (it reduces your taxable income by a certain amount). You can also get the Child Tax Credit if your income is low enough. There is a U.S.-Sweden tax treaty. It has a section covering students. It may exempt some or all of your income from U.S. tax. Most universities provide free international tax programs for their international students and scholars. You should look to see if your school offers this. Don't go to outside tax filing places because those generally don't know anything about how to file for nonresidents.", "title": "" }, { "docid": "dbb1a5aaa7bc8c7f62db10fa77815473", "text": "Based on your numbers, it sounds like you've got 12 years left in the private student loan, which just seems to be an annoyance to me. You have the cash to pay it off, but that may not be the optimal solution. You've got $85k in cash! That's way too much. So your options are: -Invest 40k -Pay 2.25% loan off -Prepay mortgage 40k Play around with this link: mortgage calculator Paying the student loan, and applying the $315 to the monthly mortgage reduces your mortgage by 8 years. It also reduces the nag factor of the student loan. Prepaying the mortgage (one time) reduces it by 6 years. (But, that reduces the total cost of the mortgage over it's lifetime the most) Prepaying the mortgage and re-amortizing it over thirty years (at the same rate) reduces your mortgage payment by $210, which you could apply to the student loan, but you'd need to come up with an extra $105 a month.", "title": "" }, { "docid": "add38ca7424072cd6aa0226650874a23", "text": "\"I had about $16k in student loans. I defaulted on the loans, and they got > passed to a collection type agency (OSCEOLA). These guys are as legitimate as a collection agency can be. One thing that I feel is very sketchy is when they were verifying my identity they said \"\"Does your Social Security Number end in ####. Is your Birthday Month/Day/Year.\"\" That is not sketchy. It would be sketchy for a caller to ask you to give that information; that's a common scheme for identity theft. OSCEOLA are following the rules on this one. My mom suggested I should consider applying for bankruptcy Won't help. Student loans can't be discharged in bankruptcy. You have the bankruptcy \"\"reform\"\" act passed during the Bush 43 regime for that. The loan itself is from school. What school? Contact them and ask for help. They may have washed their hands of your case when they turned over your file to OSCEOLA. Then again, they may not. It's worth finding out. Also, name and shame the school. Future applicants should be warned that they will do this. What can I do to aid in my negotiations with this company? Don't negotiate on the phone. You've discovered that they won't honor such negotiations. Ask for written communications sent by postal mail. Keep copies of everything, including both sides of the canceled checks you use to make payments (during the six months and in the future). Keep making the payments you agreed to in the conversation six months ago. Do not, EVER, ignore a letter from them. Do not, EVER, skip going to court if they send you a summons to appear. They count on people doing this. They can get a default judgement if you don't show up. Then you're well and truly screwed. What do you want? You want the $4K fee removed. If you want something else, figure out what it is. Here's what to do: Write them a polite letter explaining what you said here. Recount the conversation you had with their telephone agent where they said they would remove the $4K fee if you made payments. Recount the later conversation. If possible give the dates of both conversations and the names of the both agents. Explain the situation completely. Don't assume the recipient of your letter knows anything about your case. Include evidence that you made payments as agreed during the six months. If you were late or something, don't withhold that. Ask them to remove the extra $4K from your account, and ask for whatever else you want. Send the letter to them with a return receipt requested, or even registered mail. That will prevent them from claiming they didn't get it. And it will show them you're serious. Write a cover letter admitting your default, saying you relied on their negotiation to set things straight, and saying you're dismayed they aren't sticking to their word. The cover letter should ask for help sorting this out. Send copies of the letter with the cover letter to: Be sure to mark your letter to OSCEOLA \"\"cc\"\" all these folks, so they know you are asking for help. It can't hurt to call your congressional representative's office and ask to whom you should send the letter, and then address it by name. This is called Constituent Service, and they take pride in it. If you send this letter with copies you're letting them know you intend to fight. The collection agency may decide it's not worth the fight to get the $4K and decide to let it go. Again, if they call to pressure you, say you'd rather communicate in writing, and that they are not to call you by telephone. Then hang up. Should I hire a lawyer? Yes, but only if you get a court summons or if you don't get anywhere with this. You can give the lawyer all this paperwork I've suggested here, and it will help her come up to speed on your case. This is the kind of stuff the lawyer would do for you at well over $100 per hour. Is bankruptcy really an option Certainly not, unfortunately. Never forget that student lenders and their collection agencies are dangerous and clever predators. You are their lawful prey. They look at you, lick their chops, and think, \"\"food.\"\" Watch John Oliver's takedown of that industry. https://www.youtube.com/watch?v=hxUAntt1z2c Good luck and stay safe.\"", "title": "" }, { "docid": "85794d485be3d23157e21a9378a3e00f", "text": "To start with, I should mention that many tax preparation companies will give you any number of free consultations on tax issues — they will only charge you if you use their services to file a tax form, such as an amended return. I know that H&R Block has international tax specialists who are familiar with the issues facing F-1 students, so they might be the right people to talk about your specific situation. According to TurboTax support, you should prepare a completely new 1040NR, then submit that with a 1040X. GWU’s tax department says you can submit late 8843, so you should probably do that if you need to claim non-resident status for tax purposes.", "title": "" }, { "docid": "b8f0d645ba2c6b1ef9a62e5b425032fa", "text": "I know what you are talking about and this is what students at UC I know usually do in such cases: Talk with the cashier's/registar's office and see if you have been reported to collections. If you had plans to pay via financial aid, this can be a non-issue, but be sure. It's critical to remove your record from collections, if any. Take a loan and find out how the loan will be paid. Most lenders pay the school directly based on what the school bills for the quarter. If you signed up for X units in Fall '10 and plan to take Y units in Winter '12, add X+Y units in your list of courses. Those X units could be anything in your course catalog. Once the school sends out the bill and the lender pays it, drop the X units. This will give you a check and use that to pay out the outstanding amounts. Most schools will include all outstanding amounts in the bill for your current quarter, but I am not sure if your lenders has agreements otherwise. Also, some lenders have agreements in place to send refunds directly to them, but remember, the cashier is king and she can make refunds happen the way she likes, and she is likely to help a student unless you have a bad payment history (collections, bounced checks..)", "title": "" }, { "docid": "bd157acb0e9dec2b7b4343d6a0a95b9d", "text": "Maybe you know something I don't, but as far as I'm aware, you can't get rid of it. Student loans are with you for life. You will be sent to collections, but it doesn't disappear after 7 years. Settlements are incredibly rare unless your loan is ballooning... in which case, a settlement doesn't change all that much. You will lose tax benefits, the government will garnish 15% of your wages, and you will be a debt slave until it's paid off. Defaulting on student loans is much, much more painful than defaulting on private loans. The only exception to this is if you've made 120 months of repayments while employed at a qualifying non-profit or governmental organization. And even then, it only applies to federal loans and there are exceptions (better not refinance or the clock resets, for example). Also, if you default, you will no longer be eligible. Private student loans have no escape hatch and are equally unforgiving. Thank your elected representatives.", "title": "" }, { "docid": "6724e167a6db3a6d6cc043a9995f89a8", "text": "My grace period is up in a few months, and I am not looking forward to it. I got the minimum federal aid possible for all 4 years, so I had to turn to private loans and whatever I could make over summers and what my parents could help me with. Ended up with $50k in debt, about 20k of it being with Sallie Mae. I can confirm they are bad on the collection side already. Just happened to miss a payment during school (paid off interest every month for the last 4 years), and they called me 3 times during class, sent an email, letter, and called my bilogical dad who cosigned for the loan. I can only imagine what they are like for people defaulting. All comes down to it though, have a plan when borrowing money for school. I knew my parents would only be able to help me out a little bit, and I got minimum federal aid (as in just loans) because my step father had assets that counted against me (and he told me I was on my own). So I had to figure out how to not be screwed from the beginning. I paid off my interest every month while working during school, and made sure to work hard to graduate with a good job. I can't imagine how some students feel when they graduate with nothing.", "title": "" }, { "docid": "18ee590fcebd7e5ad0f366d50040e2e9", "text": "From the description, you have a post-1998 income contingent loan. The interest rate on those is currently 1.5% but it has varied quite a bit in the last few years due to the formula used to calculate it, which is either the inflation rate (RPI), or 1% + the highest base rate across a group of banks - whichever is smaller. This is indeed really cheap credit compared to any commercial loan you could get, though whether you should indeed just repay the minimum depends on making a proper comparison with the return on any spare money you could get after tax elsewhere. There is a table of previous interest rates. From your description I think you've had the loan for about 4 years - your final year of uni, one year of working without repayments and then two years of repayments. A very rough estimate is that you would have been charged about £300 of interest over that period. So there's still an apparent mismatch, though since both you and I made rough calculations it may be that a more precise check resolves it. But the other thing is that you should check what the date on the statement is. Once you start repaying, statements are sent for a period ending 5th April of each year. So you may well not be seeing the effect of several months of repayments since April on the statement. Finally, there's apparently an online facility you can use to get an up to date balance, though the administration of the loans repaid via PAYE is notoriously inefficient so there may well be a significant lag between a payment being made and it being reflected in your balance, though the effect should still be backdated to when you actually made it.", "title": "" }, { "docid": "0d2f672f4d952b54b5b747e72909d1ce", "text": "What are the consequences if I ignore the emails? That would depend on how much efforts the collection agency is ready to put in. I got a social security number when I took up on campus jobs at the school and I do have a credit score. Can they get a hold of this and report to the credit bureaus even though I don't live in America? Possibly yes, they may already be doing it. Will they know when I come to America and arrest me at the border or can they take away my passport? For this, they would have to file a civil case in the court and get an injunction to arrest you. Edit: Generally it is unlikely that the court may grant an arrest warrant, unless in specific cases. A lawyer advise would be more appropriate. End Edits It is possible that the visa would also get rejected as you would have to declare previous visits and credit history is not good.", "title": "" }, { "docid": "090598b25ad86dc8c42f5c2246085762", "text": "Another option, not yet discussed here, is to allow the loan to go into default and let the loaning agency repossess the property the loan was used for, after which they sell it and that sale should discharge some significant portion of the loan. Knowing where the friend and property is, you may be able to help them carry out the repossession by providing them information. Meanwhile, your credit will take a significant hit, but unless your name is on the deed/title of the property then you have little claim that the property is yours just because you're paying the loan. The contract you signed for the loan is not going to be easily bypassed with a lawsuit of any sort, so unless you can produce another contract between you and your friend it's unlikely that you can even sue them. In short, you have no claim to the property, but the loaning agency does - perhaps that's the only way to avoid paying most of the debt, but you do trade some of your credit for it. Hopefully you understand that what you loaned wasn't money, but your credit score and earning potential, and that you will be more careful who you choose to lend this to in the future.", "title": "" }, { "docid": "41bfce6ad28cda087090b8f58cb940bf", "text": "At the current rates, stated in the question, I would push additional funds towards your Stafford loans as their higher interest rates will incur interest charges almost 3 times faster than your private loans. With my loans I have not seen much information regarding private loans jumping the interest rate close to the 6.8% any time in the coming years (if others have insight to this I look forward to the comments). Due to the private loans being variable there is an element of risk to their rates increasing. Another way to look at it may be to prorate your amount of extra payments according to their interest rate. $1,000 x 0.068 /(0.068 + 0.025) = $731.18 Toward your Stafford Loans $1,000 x 0.025 /(0.068 + 0.025) = $268.82 Toward your Private Loans", "title": "" }, { "docid": "2ca173152b148d47e7161915a18a6756", "text": "Two choices: 1. Sell everything you have and move to North Korea. 2. Questions regarding loans, refinancing, mortgages, credit cards, investing and anything else that may be related to personal finance should be directed towards the subreddit /r/personalfinance. You will receive a probation (temporary ban) for disregarding this rule.", "title": "" }, { "docid": "73f46ebcfc2e50b94d835095573d2fd9", "text": "You should definitely pay the remaining loan amount as quickly as possible. A loan in bad debts means that Bank has written it off books as its a education loan and there is no collateral. The defaults do get report to CIBIL [Credit Information Bureau India] and as such you will have difficulties getting credit card / new loans in future. Talk to the Bank Manager and ask can you regularize the loan? There are multiple options you would need to talk and find out; 1. You can negotiate and arrive at a number. Typically more than the principal outstanding and less than interest and penalties charged. 2. You can request to re-do the monthly payments with new duration, this will give you more time. 3. May one time large payment and subsequent amount in monthly payments. At the end its Bank's discretion whether to accept your terms or not.", "title": "" } ]	fiqa
6529e4ddb4cde3bfbeb18dfac98d06c7	Deceived by car salesman	[ { "docid": "1eddbb5b263b55e6f0e641a145eeb363", "text": "The only thing that is important here is the documentation you and your daughter signed. If that documentation states that you were a co-signer and that your daughter was the primary on the loan, and then if the loan is not being reported in your daughter's name, you have a cause for action. If, however, the documentation says the loan is entirely in your name, the mistake is yours. Even in that case, though, your daughter may be able to take over the loan, or she may be able to take out a loan from a separate institution and use that to pay off the current loan. Obviously, this may be difficult if she does not have a credit history, which is what got you here in the first place. :(", "title": "" }, { "docid": "19a41f572fb72c31a0e903d04b283a65", "text": "\"At this point there is not much you can do. The documentation probably points to you being the sole owner and signer on the loan. Then, any civil suit will degenerate into a \"\"he said, she said\"\" scenario. Luckily, no one was truly harmed in the scenario. Obtaining financing through a car dealer is almost always not advisable. So from here, you can do what should have been done in the first place. Go to banks and credit unions so your daughter can refinance the car. You will probably get a lower rate, and there is seldom a fee. I would start with the bank/CU where she does her checking or has some other kind of a relationship. If that fails, anywhere you can actually sit and talk with a loan officer is preferable over the big corporate type banks. Car dealers lying is nothing new, it happens to everyone. Buying a car is like a battle.\"", "title": "" } ]	[ { "docid": "a6e561ad5b78a05ac6207763335bb369", "text": "\"Not having seen the movie, I don't know what you mean by \"\"fraudulent options buys.\"\" But there are two possibilities: 1) Someone placed buy orders on the account without authorization. In which case it comes down to a protracted lawsuit to determine whether the broker exercised due diligence, or whether Bruce foolishly gave someone his password. 2) The options themselves were fraudulent. In which case the OCC is responsible for making everyone whole.\"", "title": "" }, { "docid": "4a2b050aba268dcfe27aad7eefdd6ea5", "text": "There are few main reasons I can think of that the salesperson would do this: A lot of people assume it's the 3rd option always. But if the person is reputable, it's most likely 1 or 2. You can't run a business doing option 3 for long without getting a reputation.", "title": "" }, { "docid": "137a3e87be092013b7b45a65eb330fc6", "text": "The sales manager and/or finance manager applied a rebate that did not apply. It's their fault. They have internal accounts to handle these situations as they do come up from time to time. The deal is done. They have no legal ground.", "title": "" }, { "docid": "6f74e06785dd589d7d2e3505795b36bf", "text": "\"It's definitely annoying, but it's not necessarily false advertising. There is no rule or law that says they have to fix a pricing error at all, let alone within a certain period of time. Unfortunately they have no obligation to do business with you unless they take (and keep) your money. If they canceled the order and returned your money you have no binding agreement with them. On top of that, in the US... 'misleading advertising' usually refers to \"\"Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods, services or commercial activities\"\" (Lanham Act, 15 U.S.C.A. § 1125(a)). The main criteria that they evaluate before taking legal action is whether or not someone has suffered harm or loss due to the reliance on the bad information. But you're in Europe. The EU ideas behind misleading advertising tend to focus a lot more on comparing one product to someone else's and making subjective claims or false promises. Pricing does come up, but still, you need to have an ability to prove that you suffered harm or a loss from the business' actions. Even if you were able to prove that, to force the business to change its price catalog, you would need to go through legal proceedings, demonstrate the harm that you've sustained, and then have a judge decide in your favor and order the supplier to comply. My guess is that it's just not worth it for you, but you haven't specified if this is just an annoying shoe-shopping experience or if you are regularly experiencing bait-and-switch tactics from a supplier that is a crucial part of a business operation. If it's the former, just like a physical shop reserves the right to kick you out if you're not behaving, (but usually doesn't because they'd like to keep you as a customer), an online shop can update its prices whenever they like. They can change their prices too, and cancel orders. If it's the latter, then start putting together some documentation on how many times this has happened and how it has damaged your business. But before you get on the warpath I would recommend you look for another place to buy whatever you have in mind, or else try a pound of sugar in your approach to this supplier... My own business experience has shown that can go a lot way in figuring out a mutually beneficial resolution. If you want to see a bit more... Here is the EU Justice Commission's website on false advertising, Here is a PDF leaflet from the UK Office of Fair Trading that spells out what is explicitly not allowed from a business by way of advertising & business practices.\"", "title": "" }, { "docid": "6e28e5671bed55ef1c2f19f29e533bb1", "text": "\"this isn't false advertising. False advertising is offering something to lure you in but it turning out to be something totally different, substantially less or different terms than what you thought you were agreeing too. You're still getting 60% off. This is more like \"\"sleazy advertising\"\"... but tons of companies do these 24/7 \"\"sales\"\"\"", "title": "" }, { "docid": "2ef47bc6e77a08529092f461b85d993b", "text": "\"The lead story here is you owe $12,000 on a car worth $6000!! That is an appalling situation and worth a lot to get out of it. ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.) I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period. Now comes an \"\"adversary\"\", who is threatening to snatch the car away from you. I have to imagine they are emotionally motivated. How convenient :) Let them take it. But it's important to fully understand their motivations here. Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down. Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers. Let them win the battle; you win the war: make sure the legal details put you in the clear of it. Ideally, do this with consent with the grandfather \"\"in response to his direct family's wishes\"\", but keep up the theater of being really mad about it. Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it. Eventually they'll figure out they took a $6000 loss taking the car from you, and want to talk with you about that. Stay with blind rage at how they took my car. If they try to explain what \"\"upside down\"\" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go? If they ask for money, say they're swindling. \"\"You forced me, I didn't have a choice\"\". (which happens to be a good defense. They wanted it so bad; they shoulda done their homework. Since they were coercive it's not your job to disclose, nor your job to even know.) If they want you to take the car back, say \"\"can't, you forced me to buy another and I have to make payments on that one now.\"\"\"", "title": "" }, { "docid": "3cfa23856809120150fb4a487dadcfe4", "text": "Its not a scam. The car dealership does not care how you pay for the car, just that you pay. If you come to them for a loan they will try and service you. If you come with cash, they will sell you a car and not try to talk you into financing. If you come with a check from another bank, they will happily accept it. I would try to work with Equifax or a local credit union to figure out what is going on. Somehow she probably had her credit frozen. Here are some really good things to mitigate this situation: Oh and make sure you do #1 and forget about financing cars ever again. I mean if you want to build wealth.", "title": "" }, { "docid": "f00e645c272e30ba5a5a511bcd8e60d0", "text": "So, you think forcing people to buy their auto insurance doesn't provide any money? It sounds like the customer didn't even know they were paying for it. Or, are you saying that this minor scam is nothing in the grand scheme of things, and that we should expect their scams to pay out at least a few billion?", "title": "" }, { "docid": "5f9f3e4354dabf864196cecc71e910a2", "text": "So extenuating circumstances might make it OK for someone to lie to you. In this specific case, BofA withheld material information from its shareholders and asked them to approve the merger on the basis of known false information. This is, by definition, fraud.", "title": "" }, { "docid": "168704f710afdf153cf1d910d90c06eb", "text": "\"You can greatly reduce the risk if you can line up a buyer prior to purchasing the car. That kind of thing is common in business, one example is drop shipping. Also there are sales companies that specialize in these kinds of things bringing manufacturers of goods together with customers. The sales companies never take delivery of the product, just a commission on the sales. From this the manufacturers are served as they have gained a customer for their goods. The buying company is served as they can make a \"\"better\"\" end product. The two parties may have not been brought together had it not been for the sales company so on some level both are happy to pay for the service. Can you find market inequalities and profit from them? Sure. I missed a great opportunity recently. I purchased a name brand shirt from a discount store for $20. Those shirts typically sell on ebay for $80. I should have cleaned out that store's inventory, and I bet someone else did as by the time I went back they were gone. That kind of thing was almost risk-less because if the shirts did not sell, I could simply return them for the full purchase price. That and I can afford to buy a few hundred dollars worth of shirts. Can you afford to float 45K CDN? What if it takes a year to sell the car? What if the economy goes sour and you are left \"\"holding the bag\"\"? Why are not car dealers doing exactly what you propose? Here in the US this type of thing is called \"\"horse trading\"\" and is very common. I've both lost and made money on these kind of deals. I would never put a significant amount of my net worth at risk.\"", "title": "" }, { "docid": "df6212d4d0d3342b5759dd5e3439f857", "text": "You mean auto dealer bailouts? Has happened multiple times already. Also dealerships have been doing this type of lending with banks for years.. which is why direct sales is likely a mu have better model than dealership model...but hey I didn't invent this.", "title": "" }, { "docid": "5c4808c281ff489db9905e886ce65188", "text": "Except when it does. [Legal definition of fraud](http://legal-dictionary.thefreedictionary.com/fraud): Fraud must be proved by showing that the defendant's actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result. 1.) a false statement of fact is implied as the person using the coupon is representing themselves as someone who is using the coupon for the first time (as he/she is in a disguise to appear to be a different person) 2.) knowledge is clear - the person using the coupon is going to the length of donning a disguise - they know they're trying to get away with something 3.) intent is shown by the length the person went to present themselves as a new customer as well as the posts on the forum 4.) assuming the cashier was deceived by the disguise, it's reasonable that Target put the transaction through as it believed it was doing so with a new customer 5.) injury is obvious", "title": "" }, { "docid": "97aa7ee39f4e3b1bf24b0b5528de05a5", "text": "\"This is the best tl;dr I could make, [original](http://www.france24.com/en/20170601-us-car-sales-struggle-may-despite-record-discounts) reduced by 77%. (I'm a bot) *** > Auto makers offered big discounts over the Memorial Day holiday, but the response from US car buyers in May was not enough to definitively reverse months of sales declines. > After seven years of gains, there were further signs that US car sales have plateaued, analysts said, as monthly sales data suggested a mixed picture amid heavy incentives to lure buyers into showrooms, even as truck and SUV sales surged. > The biggest US car maker, GM, saw its sales fall 1.3 percent last month compared to the same period a year earlier. * [Extended Summary*](http://np.reddit.com/r/autotldr/comments/6eqkaa/auto_makers_offered_big_discounts_over_the/) \| [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~134307 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: sales^#1 percent^#2 car^#3 truck^#4 consumer^#5\"", "title": "" }, { "docid": "78c7b2bf71f314407d951a11d5e096fb", "text": "\"It's possible the $16,000 was for more than the car. Perhaps extras were added on at purchase time; or perhaps they were folded into the retail price of the car. Here's an example. 2014: I'm ready to buy. My 3-year-old trade-in originally cost $15,000, and I financed it for 6 years and still owe $6500. It has lots of miles and excess wear, so fair blue-book is $4500. I'm \"\"upside down\"\" by $2000, meaning I'd have to pay $2000 cash just to walk away from the car. I'll never have that, because I'm not a saver. So how can we get you in a new car today? Dealer says \"\"If you pay the full $15,000 retail price plus $1000 of worthless dealer add-ons like wax undercoat (instead of the common discounted $14,000 price), I'll eat your $2000 loss on the trade.\"\" All gets folded into my new car financing. It's magic! (actually it's called rollover.) 2017: I'm getting itchy to trade up, and doggone it, I'm upside down on this car. Why does this keep happening to me? In this case, it's rollover and other add-ons, combined with too-long car loans (6 year), combined with excessive mileage and wear on the vehicle.\"", "title": "" }, { "docid": "5bcc7514248f05f2d1846ea0d0d54932", "text": "That is horrible. I would contact your local news stations, local authorities, and demand to talk to the owner of the dealership. Get the story out on social media and do everything you can to put bad publicly on the dealership. Maybe they will see how big of a fuck up they made and make things right. Fuck those guys.", "title": "" } ]	fiqa
287ccaeb1ceb107b7fb7b6ff22d7fa8f	How to calculate money needed for bills, by day	[ { "docid": "ef082fd9f0274dc21b86a1c9cf21dd9b", "text": "I think you might benefit from adopting a zero-sum budget, in which you plan where each dollar will be spent ahead of time, rather than simply track spending or worry about the next expense. Here's a pretty good article on the subject: How and Why to Use a Zero-Sum Budget. This is the philosophy behind a popular budgeting tool You Need a Budget, I am not advocating the tool, but I am a fan of the idea that a budget is less about tracking spending and more about planning spending. That said, to answer your specific question, one method for tracking your min-needed for upcoming expenses would be to record the date, expense, amount due, and amount paid as shown here: Then the formula to calculate the min-needed (entered in E1 and copied down) would be: As you populate amounts paid, the MinNeeded is adjusted for all subsequent rows. You could get fancier and only populate the MinNeeded field on dates where an expense is due using IF().", "title": "" }, { "docid": "4a3829db16c7d062c1b2c885c9d3c0f4", "text": "If I understand you right, what you need is the minimum amount in the account until your next deposit. So for example, if today is the 10th and you get paid on the 15th, how much do I need to have in the account, so I know how much I can spend? That amount should be all of the bills that will be paid between today and the 15th. An alternative would just to keep a running balance and see what the minimum value is. My personal finance software does that for me, but it's possible, although a little more complicated, in Excel. You'd have to find the date of the next deposit, and do a SUMIF looking for dates between today and that date. That's about as far as I can get without getting off-topic.", "title": "" }, { "docid": "af8082def21f44a1b9f418f3c16c3302", "text": "\"Trying to figure out how much money you have available each day sounds like you're making this more complicated than it needs to be. Unless you're extremely tight and you're trying to squeeze by day by day, asking \"\"do I have enough cash to buy food for today?\"\" and so on, you're doing too much work. Here's what I do. I make a list of all my bills. Some are a fixed amount every month, like the mortgage and insurance premiums. Others are variable, like electric and heating bills, but still pretty predictable. Most bills are monthly, but I have a few that come less frequently, like water bills in my area come every 3 months and I have to pay property taxes twice a year. For these you have to calculate how much they cost each month. Like for the water bill, it's once every 3 months so I divide a typical bill by 3. Always round up or estimate a little high to be safe. Groceries are a little tricky because I don't buy groceries on any regular schedule, and sometimes I buy a whole bunch at once and other times just a few things. When groceries were a bigger share of my income, I kept track of what I spent for a couple of months to figure out an average per month. (Today I'm a little richer and I just think of groceries as coming from my spending money.) I allocate a percentage of my income for contributions to church and charities and count this just like bills. It's a good idea to put aside something for savings and/or paying down any outstanding loans every month. Then I add these up to say okay, here's how much I need each month to pay the bills. Subtract that from my monthly income and that's what I have for spending money. I get paid twice a month so I generally pay bills when I get paid. For most bills the due date is far enough ahead that I can wait the maximum half a month to pay it. (Worst case the bill comes the day after I pay the bills from this paycheck.) Then I keep enough money in my checking account to, (a) Cover any bills until the next paycheck and allow for the particularly large bills; and (b) provide some cushion in case I make a mistake -- forget to record a check or make an arithmetic error or whatever; and (c) provide some cushion for short-term unexpected expenses. To be safe, (a) should be the total of your bills for a month, or as close to that as you can manage. (b) should be a couple of hundred dollars if you can manage it, more if you make a lot of mistakes. If you've calculated your expenses properly and only spend the difference, keeping enough money in the bank should fall out naturally. I think it's a lot easier to try to manage your money on a monthly basis than on a daily basis. Most of us don't spend money every day, and we spend wildly different amounts from day to day. Most days I probably spend zero, but then one day I'll buy a new TV or computer and spend hundreds. Update in response to question What I do in real life is this: To calculate my available cash to spend, I simply take the balance in my checking account -- assuming that all checks and electronic payments have cleared. My mortgage is deducted from my checking every month so I post that to my checking a month in advance. I pay a lot of things with automatic charges to a credit card these days, so my credit card bills are large and can't be ignored. So subtract my credit card balances. Subtract my reserve amount. What's left is how much I can afford to spend. So for example: Say I look at the balance in my checkbook today and it's, say, $3000. That's the balance after any checks and other transactions have cleared, and after subtracting my next mortgage payment. Then I subtract what I owe on credit cards. Let's say that was $1,200. So that leaves $1,800. I try to keep a reserve of $1,500. That's plenty to pay my routine monthly bills and leave a healthy reserve. So subtract another $1,500 leaves $300. That's how much I can spend. I could keep track of this with a spreadsheet or a database but what would that gain? The amount in my checking account is actual money. Any spreadsheet could accumulate errors and get farther and farther from accurate values. I use a spreadsheet to figure out how much spending money I should have each month, but that's just to use as a guideline. If it came to, say, $100, I wouldn't make grandiose plans about buying a new Mercedes. If it came to $5,000 a month than buying a fancy new car might be realistic. It also tells me how much I can spend without having to carefully check balances and add it up. These days I have a fair amount of spending money so when, for example, I recently decided I wanted to buy some software that cost $100 I just bought it with barely a second thought. When my spending money was more like $100 a month, lunch at a fast food place was a big event that I planned weeks in advance. (Obviously, I hope, don't get stupid about \"\"small amounts\"\". If you can easily afford $100 for an impulse purchase, that doesn't mean that you can afford $100 five times a day every day.) Two caveats: 1. It helps to have a limited number of credit cards so you can keep the balances under control. I have two credit cards I use for almost everything, so I only have two balances to keep track of. I used to have more and it got confusing, it was easy to lose track of how much I really owed, which is a set up for getting in trouble.\"", "title": "" } ]	[ { "docid": "c6fa632a4fe912a3d78b7a6592e82079", "text": "\"I wrote a little program one time to try to do this. I think I wrote it in Python or something. The idea was to have a list of \"\"projected expenses\"\" where each one would have things like the amount, the date of the next transaction, the frequency of the transaction, and so on. The program would then simulate time, determining when the next transaction would be, updating balances, and so on. You can actually do a very similar thing with a spreadsheet where you basically have a list of expenses that you manually paste in for each month in advance. Simply keep a running balance of each row, and make sure you don't forget any transactions that should be happening. This works great for fixed expenses, or expenses that you know how much they are going to be for the next month. If you don't know, you can estimate, for instance you can make an educated guess at how much your electric bill will be the next month (if you haven't gotten the bill yet) and you can estimate how much you will spend on fuel based on reviewing previous months and some idea of whether your usage will differ in the next month. For variable expenses I would always err on the side of a larger amount than I expected to spend. It isn't going to be possible to budget to the exact penny unless you lead a very simple life, but the extra you allocate is important to cushion unexpected and unavoidable overruns. Once you have this done for expenses against your bank account, you can see what your \"\"low water mark\"\" is for the month, or whatever time period you project out to. If this is above your minimum, then you can see how much you can safely allocate to, e.g. paying off debt. Throwing a credit card into the mix can make things a bit more predictable in the current month, especially for unpredictable amounts, but it is a bit more complicated as now you have a second account that you have to track that has to get deducted from your first account when it becomes due in the following month. I am assuming a typical card where you have something like a 25 day grace period to pay without interest along with up to 30 days after the expense before the grace period starts, depending on the relationship between your cut-off date and when the actual expense occurs.\"", "title": "" }, { "docid": "7e5b4f091f7a0e9f2328d42e944873bc", "text": "I don't believe you would be able to with only Net Sales and COGS. Are you talking about trying to estimate them? Because then I could probably come up with an idea based on industry averages, etc. I think you would need to know the average days outstanding, inventory turnover and the terms they're getting from their vendors to calculate actuals. There may be other ways to solve the problem you're asking but thats my thoughts on it.", "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": "06724d4ce9c252533e99ccea2c29973c", "text": "If I is the initial deposit, P the periodic deposit, r the rent per period, n the number of periods, and F the final value, than we can combine two formulas into one to get the following answer: F = I(1+r)n + P[(1+r)n-1]/r In this case, you get V = 1000(1.05)20 + 100[(1.05)20-1]/0.05 = 5959.89 USD. Note that the actual final value may be lower because of rounding errors.", "title": "" }, { "docid": "bdd8fa9f4d6bc17263d47ddaed5de744", "text": "I don't use a rule of thumb for this. Instead, I use a budget. Throwing money into a savings account for the purpose of building a savings account is okay, but I only put money into a savings account that I have a purpose for. For example, there are bills that come up once a year, such as insurance premiums, property tax, annual subscriptions and memberships, etc. I plan for these in my budget each month, and the money goes into my savings. I also have an emergency fund, which is used in the event that a large, one-time, unexpected expense comes up that I hadn't planned for. I have a goal for how large I want this fund to be, so I put money in savings until it is built up to the level I want it at. There are other long range saving goals I have: my next car, vacation, furniture replacement, technology replacement, etc. Each of these gets some money each month, which goes into savings. I also have retirement savings in the budget, but that doesn't go into the savings account; it gets invested in my retirement account. My point is that instead of arbitrarily choosing a percentage of your income to put into a savings account, think about the purpose of that money. That will help you determine how much needs to be saved, and it will also help motivate you to do so.", "title": "" }, { "docid": "01d88eba80895040dd663fec951a0435", "text": "R = I ^ P R = return (2 means double) I = (Intrest rate / 100) + 1 [1.104 = 10.4%] P = number of periods (7 years) 2 = 1.104 ^ 7 (you double your money in seven years with a yearly Intrest rate of 10.4%) I = R^(1/P) 1.104 = 2^(1/7) P = log(R) / log(I) 7 = log(2) / log(1.104)", "title": "" }, { "docid": "4e5b323e00d0f3483c4b8e7f58baee9d", "text": "Perhaps there is no single formula that accounts for all the time intervals, but there is a method to get formulas for each compound interest period. You deposit money monthly but there is interest applied weekly. Let's assume the month has 4 weeks. So you added x in the end of the first month, when the new month starts, you have x money in your account. After one week, you have x + bx money. After the second week, you have x + b(x + bx) and so on. Always taking the previous ammount of money and multiplying it by the interest (b) you have. This gives you for the end of the second month: This looks complicated, but it's easy for computers. Call it f(0), that is: It is a function that gives you the ammount of money you would obtain by the end of the second month. Do you see that the future money inputs are given with relation to the previous ones? Then we can do the following, for n>1 (notice the x is the end of the formula, it's the deposit of money in the end of the month, I'm assuming it'll pass through the compound interest only in the first week of the next month): And then write: There is something in mathematics called recurrence relation in which we can use these two formulas to produce a simplified one for arbitrary b and n. Doing it by hand would be a bit complicated, but fortunately CASes are able to do it easily. I used Wolfram Mathematica commands: And it gave me the following formula: All the work you actually have to do is to figure out what will be f(0) and then write the f(n) for n>0 in terms of f(n-1). Notice that I used the command FullSimplify in my code, Mathematica comes with algorithms for simplyfing formulas so if it didn't find something simpler, you probably won't find it by yourself! If the code looks ugly, it's because of Mathematica clipboard formatting, in the software, it looks like this: Notice that I wrote the entire formula for f(0), but as it's also a recurrence relation, it can be written as: That is: f(0)=g(4). This should give you much simpler formulas to apply in this method.", "title": "" }, { "docid": "a6fed25c052bb6f17e2cefe0c453afae", "text": "\"Make a list of all your expenses. I use an Excel spreadsheet but you can do it on the back of a napkin if you prefer. List fixed expenses, like rent, loan payments, insurance, etc. I include giving to church and charity as fixed expenses, but of course that's up to you. List regular but not fixed expenses, like food, heat and electricity, gas, etc. Come up with reasonable average or typical values for these. Keep records for at least a few months so you're not just guessing. (Though remember that some will vary with the season: presumably you spend a lot more on heat in the winter than in the summer, etc.) You should budget to put something into savings and retirement. If you're young and just starting out, it's easy to decide to postpone retirement savings. But the sooner you start, the more the money will add up. Even if you can't put away a lot, try to put away SOMETHING. And if you budget for it, you should just get used to not having this money to play with. Then total all this up and compare to your income. If the total is more than your income, you have a problem! You need to find a way to cut some expenses. I won't go any further with that thought -- that's another subject. Hopefully you have some money left over after paying all the regular expenses. That's what you have to play with for entertainment and other non-essentials. Make a schedule for paying your bills. I get paid twice a month, and so I pay most of my bills when I get a paycheck. I have some bills that I allocate to the first check of the month and some to the second, for others, whatever bills came in since my last check, I pay with the current check. I have it arranged so each check is big enough to pay all the bills that come from that check. If you can't do that, if you'll have a surplus from one check and a shortage from the next, then be sure to put money aside from the surplus check to cover the bills you'll pay at the next pay period. Always pay your bills before you spend money on entertainment. Always have a plan to pay your bills. Don't say, \"\"oh, I'll come up with the money somehow\"\". If you have debt -- student loans, car loans, etc -- have a plan to pay it off. One of the most common traps people fall into is saying, \"\"I really need to get out of debt. And I'm going to start paying off my debt. Next month, because this month I really want to buy this way cool toy.\"\" They put off getting out of debt until they have frittered away huge amounts of money on interest. Or worse, they keep accumulating new debt until they can't even pay the interest.\"", "title": "" }, { "docid": "b5ce0e715bbecbe660d6f410a6281b97", "text": "There is a way to get a reasonable estimate of what you still owe, and then the way to get the exact value. When the loan started they should have given you amortization table that laid out each payment including the principal, interest and balance for each payment. If there are any other fees included in the payment those also should have been detailed. Determine how may payments you have maid: did you make the first payment on day one, or the start of the next month? Was the last payment the 24th, or the next one? The table will then tell you what you owe after your most recent payment. To get the exact value call the lender. The amount grows between payment due to the interest that is accumulating. They will need to know when the payment will arrive so they can give you the correct value. To calculate how much you will save do the following calculation: payment = monthly payment for principal and interest paymentsmade =Number of payments made = 24 paymentsremaining = Number of payments remaining = 60 - paymentsmade = 60-24 = 36 instantpayoff = number from loan company savings = (payment * paymentsremaining ) - instantpayoff", "title": "" }, { "docid": "9fc78a4a2264f71ee209de0eda2b0566", "text": "The easiest way to get started on a budget is just to track where you spend your money. If you have set bills each month I would make a category for each of those to make sure you have enough to pay. You can try and split up the remaining income into categories but the easiest way to start is just to track your spending for a month or two. This gives you a birds eye view of what is actually realistic. Start with that total as your preliminary budget and then adjust as you go along to meet other financial goals. We use neobudget.com for tracking our income.", "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": "a3a475e9ceafd18496fb07e18fb37c9c", "text": "No. It's the total on the bill statement that's reported, not the daily value. Pay before the bill is cut and you are fine. This is a great strategy for those who find their line to be too low. Update - when I answered this, it was true, and pretty much went unchallenged. Some months back, a card I use changed banks. And my score blipped down. I had been on the habit of paying most of my balance in full the day of, or day before the statement was cut. I saw the balance reported on this card was as of the last day of the month, not the amount billed. I started paying the card's full balance on the 30/31 and the score returned to normal. This was the first I'd ever seen this, and no other member here has shared the same experience, yet.", "title": "" }, { "docid": "6724e21772c00e77a51192829255d57e", "text": "So hopefully you are not spending the money before you make it. If you are, you are asking for trouble. If not the solution is easy. If you use a spreadsheet for tracking have a item in your checking account running total that is simply CC to pay. Lets say you just got paid, and your balance is like this: You can then do virtual withdrawals for each category In this case you have 70 left to spend. Whoops the car gets a flat which costs you 5 that you put on the card and you also pay your rent by CC. Then your spreadsheet should look like this: You still have the 70 left to spend, and when the CC bill comes due you are free to write the check.", "title": "" }, { "docid": "498db99de29e752203935a5442bc5447", "text": "You have to track your spending for a month, down to the cent. Without those records, the person trying to help you has no real data. Even a week would be a start. Heck, try just doing this today. See if it works for you. Throughout each day: Each evening: At the end of a month (or week, or whatever period you want): Each day you do it successfully it will get easier. Let us know how it works out! Best wishes!", "title": "" }, { "docid": "5c291b45326bdd1bed1fdb57f3537c81", "text": "\"Stock support and resistance levels mean that historically, there was \"\"heavy\"\" buying/selling at those levels. This suggests, but does not guarantee, that \"\"someone\"\" will buy at \"\"support\"\" levels, and \"\"someone\"\" will sell at \"\"resistance levels. Any \"\"history\"\" is meaningful, but most analysts will say that after six months to a year, the impact of events declines the further back in time you go. They can be meaningful for periods as short as days.\"", "title": "" } ]	fiqa
23356f49135f50168f428a8a8c43c90f	Should an IRA be disclaimed to allow it to be distributed according to a will?	[ { "docid": "36dc4003aa8566c138d2964fa3226125", "text": "There are two different possible taxes based on various scenarios proposed by the OP or the lawyer who drew up the OP's father's will or the OP's mother. First, there is the estate tax which is paid by the estate of the deceased, and the heirs get what is left. Most estates in the US pay no estate tax whatsoever because most estates are smaller than $5.4M lifetime gift and estate tax exemption. But, for the record, even though IRAs pass from owner to beneficiary independent of whatever the will might say about the disposition of the IRAs, the value of the deceased's IRAs is part of the estate, and if the estate is large enough that estate tax is due and there is not enough money in the rest of the estate to pay the estate tax (e.g. most of the estate value is IRA money and there are no other investments, just a bank account with a small balance), then the executor of the will can petition the probate court to claw back some of the IRA money from the IRA beneficiaries to pay the estate tax due. Second, there is income tax that the estate must pay on income received from the estate's assets, e.g. mutual fund dividends paid between the date of death and the distribution of the assets to the beneficiaries, or income from cashing in IRAs that have the estate as the beneficiary. Now, most of OP's father's estate is in IRAs which have the OP's mother as the primary beneficiary and there are no named secondary beneficiaries. Thus, by default, the estate is the IRA beneficiary should the OP's mother disclaim the IRAs as the lawyer has suggested. As @JoeTaxpayer says in a comment, if the OP's mother disclaims the IRA, then the estate must distribute all the IRA assets to the three beneficiaries by December 31 of the year in which the fifth anniversary of the death occurs. If the estate decides to do this by itself, then the distribution from the IRA to the estate is taxable income to the estate (best avoided if possible because of the high tax rates on trusts). What is commonly done is that before December 31 of the year following the year in which the death occurred, the estate (as the beneficiary) informs the IRA Custodian that the estate's beneficiaries are the surviving spouse (50%), and the two children (25% each) and requests the IRA custodian to divide the IRA assets accordingly and let each beneficiary be responsible for meeting the requirements of the 5-year rule for his/her share. Any assets not distributed in timely fashion are subject to a 50% excise tax as penalty each year until such time as these monies are actually withdrawn explicitly from the IRA (that is, the excise tax is not deducted from the remaining IRA assets; the beneficiary has to pay the excise tax out of pocket). As far as the IRS is concerned, there are no yearly distribution requirements to be met but the IRA Custodial Agreement might have its own rules, and so Publication 590b recommends discussing the distribution requirements for the 5-year rule with the IRA Custodian. The money distributed from the IRA is taxable income to the recipients. In particular, the children cannot roll the money over into another IRA so as to avoid immediate taxation; the spouse might be able to roll over the money into another IRA, but I am not sure about this; Publication 590b is very confusing on this point. All this is assuming that the deceased passed away before well before his 70.5th birthday so that there are no issues with RMDs (the interactions of all the rules in this case is an even bigger can of worms that I will leave to someone else to explicate). On the other hand, if the OP's mother does not disclaim the IRAs, then she, as the surviving spouse, has the option of treating the inherited IRAs as her own IRAs, and she could then name her two children as the beneficiaries of the inherited IRAs when she passes away. Of course, by the same token, she could opt to make someone else the beneficiary (e.g, her children from a previous marriage) or change her mind at any later time and make someone else the beneficiary (e.g. if she remarries, or becomes very fond of the person taking care of her in a nursing home and decides to leave all her assets to this person instead of her children, etc). But even if such disinheritances are unlikely and the children are perfectly happy to wait to inherit till Mom passes away, as JoeTaxpayer points out, by not disclaiming the IRAs, the OP's mother can delay taking distributions from the IRAs till age 70.5, etc. which is also a good option to have. The worst scenario is for the OP's mother to not disclaim the IRAs, cash them in right away (huge income tax whack on her) or at least 50% of them, and gift the OP and his sibling half of what she withdrew (or possibly after taking into account what she had to pay in income tax on the distribution). Gift tax need not be paid by the OP's mother if she files Form 709 and reduces her lifetime combined gift and estate tax exemption, and the OP and his sibling don't owe any tax (income or otherwise) on the gift amount. But, all that money has changed from tax-deferred assets to ordinary assets, and any additional earnings on these assets in the future will be taxable income. So, unless the OP and his sibling need the cash right away (pay off credit card debt, make a downpayment on a house, etc), this is not a good idea at all.", "title": "" }, { "docid": "62d87d57d8983cfcd5b6402e797eeef7", "text": "She is very wrong. If the IRA is a traditional, i.e. A pretax IRA (not a Roth), all withdrawals are subject to tax at one's marginal rate. Read that to mean that a large sum can easily push her into higher brackets than normal. If it stayed with her, she'd take smaller withdrawals and be able to throttle her tax impact. Once she takes it all out, and gifts it to you, no gift tax is due, but there's form 709, where it's declared, and counts against her $5.5M lifetime estate exemption. There are a few things in the world of finance that offend me as much as lawyer malpractice, going into an area they are ignorant of.", "title": "" } ]	[ { "docid": "fb9d030ac35296ba5c9fae89e43b890a", "text": "Once upon a time, money rolled over from a 401k or 403b plan into an IRA could not be rolled into another 401k or 403b unless the IRA account was properly titled as a Rollover IRA (instead of Traditional IRA - Roth IRAs were still in the future) and the money kept separate (not commingled) with contributions to Traditional IRAs. Much of that has fallen by the way side as the rules have become more relaxed. Also the desire to roll over money into a 401k plan at one's new job has decreased too -- far too many employer-sponsored retirement plans have large management fees and the investments are rarely the best available: one can generally do better keeping ex-401k money outside a new 401k, though of course new contributions from salary earned at the new employer perforce must be put into the employer's 401k. While consolidating one's IRA accounts at one brokerage or one fund family certainly saves on the paperwork, it is worth keeping in mind that putting all one's eggs in one basket might not be the best idea, especially for those concerned that an employee might, like Matilda, take me money and run Venezuela. Another issue is that while one may have diversified investments at the brokerage or fund family, the entire IRA must have the same set of beneficiaries: one cannot leave the money invested in GM stock (or Fund A) to one person and the money invested in Ford stock (or Fund B) to another if one so desires. Thinking far ahead into the future, if one is interested in making charitable bequests, it is the best strategy tax-wise to make these bequests from tax-deferred monies rather than from post-tax money. Since IRAs pass outside the will, one can keep separate IRA accounts with different companies, with, say, the Vanguard IRA having primary beneficiary United Way and the Fidelity IRA having primary beneficiary the American Cancer Society, etc. to achieve the appropriate charitable bequests.", "title": "" }, { "docid": "df4fa1cf349ebf78d37f57c8c81557e5", "text": "\"> Who gets control of your wealth when you pass away then? If someone has no remaining heirs in his/her generation then he/she can leave the money to the charity/non-profit of choice. Of course, it would be illegal to set up the \"\"give lots of money to Mr. Burns descendants\"\" endowment.\"", "title": "" }, { "docid": "49f29b55b33e9105340e11bfb78539e9", "text": "You also may want to consider how this interacts with the stepped up basis of estates. If you never sell the stock and it passes to your heirs with your estate, under current tax law the basis will increase from the purchase price to the market price at the time of transfer. In a comment, you proposed: Thinking more deeply though, I am a little skeptical that it's a free lunch: Say I buy stock A (a computer manufacturer) at $100 which I intend to hold long term. It ends up falling to $80 and the robo-advisor sells it for tax loss harvesting, buying stock B (a similar computer manufacturer) as a replacement. So I benefit from realizing those losses. HOWEVER, say both stocks then rise by 50% over 3 years. At this point, selling B gives me more capital gains tax than if I had held A through the losses, since A's rise from 80 back to 100 would have been free for me since I purchased at 100. And then later thought Although thinking even more (sorry, thinking out loud here), I guess I still come out ahead on taxes since I was able to deduct the $20 loss on A against ordinary income, and while I pay extra capital gains on B, that's a lower tax rate. So the free lunch is $20[number of shares]([my tax bracket] - [capital gains rates]) That's true. And in addition to that, if you never sell B, which continues to rise to $200 (was last at $120 after a 50% increase from $80), the basis steps up to $200 on transfer to your heirs. Of course, your estate may have to pay a 40% tax on the $200 before transferring the shares to your heirs. So this isn't exactly a free lunch either. But you have to pay that 40% tax regardless of the form in which the money is held. Cash, real estate, stocks, whatever. Whether you have a large or small capital gain on the stock is irrelevant to the estate tax. This type of planning may not matter to you personally, but it is another aspect of what wealth management can impact.", "title": "" }, { "docid": "8459f004f4e0af10ecbb3300600c0704", "text": "\"First - for anyone else reading - An IRA that has no beneficiary listed on the account itself passes through the will, and this eliminates the opportunity to take withdrawals over the beneficiaries' lifetimes. There's a five year distribution requirement. Also, with a proper beneficiary set up on the IRA account the will does not apply to the IRA. An IRA with me as sole beneficiary regardless of the will saying \"\"all my assets I leave to the ASPCA.\"\" This is also a warning to keep that beneficiary current. It's possible that one's ex-spouse is still on IRA or 401(k) accounts as beneficiary and new spouse is in for a surprise when hubby/wife passes. Sorry for the tangent, but this is all important to know. The funneling of a beneficiary IRA through a trust is not for amateurs. If set up incorrectly, the trust will not allow the stretch/lifetime withdrawals, but will result in a broken IRA. Trusts are not cheap, nor would I have any faith in any attorney setting it up. I would only use an attorney who specializes in Trusts and Estate planning. As littleadv suggested, they don't have to be minors. It turns out that the expense to set up the trust ($1K-2K depending on location) can help keep your adult child from blowing through a huge IRA quickly. I'd suggest that the trust distribute the RMDs in early years, and a higher amount, say 10% in years to follow, unless you want it to go just RMD for its entire life. Or greater flexibility releasing larger amounts based on life events. The tough part of that is you need a trustee who is willing to handle this and will do it at a low cost. If you go with Child's name only, I don't know many 18/21 year old kids who would either understand the RMD rules on IRAs or be willing to use the money over decades instead of blowing it. Edit - A WSJ article Inherited IRAs: a Sweet Deal and my own On my Death, Please, Take a Breath, an article that suggests for even an adult, education on how RMDs work is a great idea.\"", "title": "" }, { "docid": "0d1246ed1d6f0a9677726f03e26d78a8", "text": "Because this is Money.SE and you're connecting it to offspring, I'd think about a discussion with them to get their agreements. From my perspective, anything (my wife and) I have will go to offspring in the end. As such, everything borrowed and not repaid simply reduces the estate by that much. Among multiple offspring, such reductions should be against the borrower rather than spreading it out. That should be accounted for in whatever will is created. This would be the discussion point. It might also be discussed how or even if any interest should accrue for unpaid amounts. If, for example, a 1% APR is agreed upon for unpaid loans, then the final principle+interest amount is taken off of the borrower's inheritance. Existing outstanding loans might (or might not!) be useful examples for sample calculations if desired or needed. (If nothing else, they might serve as reminders that loans were not forgotten.) By having such a discussion, you can show that you are trying to plan for a fair distribution of your estate, perhaps thereby sidestepping any concern about charging interest to offspring for repaid loans. At the same time, you're handing over some financial responsibility, giving them a power of personal choice, which seems to be a part of what you're concerned about. Once such a discussion is started, it's possible that any question of interest will resolve itself naturally. The discussion almost necessarily must include all offspring at once. One will find it harder to negotiate from a standpoint of pure self-interest without objection from another. Think beforehand about what will be said and about what responses might come. Think things through as much as you can.", "title": "" }, { "docid": "a83b5dd0290b284fe4ca0d42b88cebfd", "text": "\"All transactions within an IRA are irrelevant as far as the taxation of the distributions from the IRA are concerned. You can only take cash from an IRA, and a (cash) distribution from a Traditional IRA is taxable as ordinary income (same as interest from a bank, say) without the advantage of any of the special tax rates for long-term capital gains or qualified dividends even if that cash was generated within the IRA from sales of stock etc. In short, just as with what is alleged to occur with respect to Las Vegas, what happens within the IRA stays within the IRA. Note: some IRA custodians are willing to make a distribution of stock or mutual fund shares to you, so that ownership of the 100 shares of GE, say, that you hold within your IRA is transferred to you in your personal (non-IRA) brokerage account. But, as far as the IRS is concerned, your IRA custodian sold the stock as the closing price on the day of the distribution, gave you the cash, and you promptly bought the 100 shares (at the closing price) in your personal brokerage account with the cash that you received from the IRA. It is just that your custodian saved the transaction fees involved in selling 100 shares of GE stock inside the IRA and you saved the transaction fee for buying 100 shares of GE stock in your personal brokerage account. Your basis in the 100 shares of GE stock is the \"\"cash_ that you imputedly received as a distribution from the IRA, so that when you sell the shares at some future time, your capital gains (or losses) will be with respect to this basis. The capital gains that occurred within the IRA when the shares were imputedly sold by your IRA custodian remain within the IRA, and you don't get to pay taxes on that at capital gains rates. That being said, I would like to add to what NathanL told you in his answer. Your mother passed away in 2011 and you are now 60 years old (so 54 or 55 in 2011?). It is likely that your mother was over 70.5 years old when she passed away, and so she likely had started taking Required Minimum Distributions from her IRA before her death. So, You should have been taking RMDs from the Inherited IRA starting with Year 2012. (The RMD for 2011, if not taken already by your mother before she passed away, should have been taken by her estate, and distributed to her heirs in accordance with her will, or, if she died intestate, in accordance with state law and/or probate court directives). There would not have been any 10% penalty tax due on the RMDs taken by you on the grounds that you were not 59.5 years old as yet; that rule applies to owners (your mom in this case) and not to beneficiaries (you in this case). So, have you taken the RMDs for 2012-2016? Or were you waiting to turn 59.5 before taking distributions in the mistaken belief that you would have to pay a 10% penalty for early wthdrawal? The penalty for not taking a RMD is 50% of the amount not distributed; yes, 50%. If you didn't take RMDs from the Inherited IRA for years 2012-2016, I recommend that you consult a CPA with expertise in tax law. Ask the CPA if he/she is an Enrolled Agent with the IRS: Enrolled Agents have to pass an exam administered by the IRS to show that they really understand tax law and are not just blowing smoke, and can represent you in front of the IRS in cases of audit etc,\"", "title": "" }, { "docid": "d90d0c190348a1293aef06588932c858", "text": "No. Disclaimer - As a US educated fellow, I needed to search a bit. I found an article 7 Common SMSF Pension Errors. It implied that there are minimum payments required each year as with our US retirement accounts. These minimums are unrelated to the assets within the account, just based on the total value. The way I read that, there would be a point where you'd have to sell a property or partial interest to be sure you have the cash to distribute each year. I also learned that unlike US rules, which permit a distribution of stock as part of a required minimum distribution, in Australia, the distribution must be in cash (or a deposited check, of course.)", "title": "" }, { "docid": "65d0e65fc15b89d957ea8f4aacf84849", "text": "Brokerages are supposed to keep your money separate from theirs. So, even if they fail as a company, your money and investments are still there, and can be transferred to another brokerage. It doesn't matter if it's an IRA or taxable account. Of course, as is the case with MF Global, if illegally take their client's money (i.e., steal), it may be a different story. In such cases, SIPC covers up to $500K, of which $250K can be cash, as JoeTaxpayer said. You may be interested in the following news item from the SEC. It's about some proposed changes, but to frame the proposal they lay out the way it is now: http://www.sec.gov/news/press/2011/2011-128.htm The most relevant quote: The Customer Protection Rule (Rule 15c3-3). This SEC rule requires a broker-dealer to segregate customer securities and cash from the firm’s proprietary business activities. If the broker-dealer fails, these customer assets should be readily available to be returned to customers.", "title": "" }, { "docid": "8f77159e3b4d193b5e3b72e959ddf5cf", "text": "You don't need to submit a K-1 form to anyone, but you will need to transcribe various entries on the K-1 form that you will receive onto the appropriate lines on your tax return. Broadly speaking, assets received as a bequest from someone are not taxable income to you but any money that was received by your grandmother's estate between the time of death and the time of distribution of the assets (e.g. interest, mutual fund distributions paid in cash, etc) might be passed on to you in full instead of the estate paying income tax on this income and sending you only the remainder. If so, this other money would be taxable income to you. The good news is that if the estate trust distributions include stock, your basis for the stock is the value as of the date of death (nitpickers: I am aware that the estate is allowed to pick a different date for the valuation but I am trying to keep it simple here). That is, if the stock has appreciated, your grandmother never paid capital gains on those unrealized capital gains, and you don't have to pay tax on those capital gains either; your basis is the appreciated value and if and when you sell the stock, you pay tax only on the gain, if any, between the day that Grandma passed away and the day you sell the stock.", "title": "" }, { "docid": "61bca5eaadfad484bdc2f9c3fa39eb81", "text": "You should talk to a tax professional in your area. It seems like you should start filing your returns. In the US there are certain income thresholds that need to be attained before a return is required, though it's often thought of as best practice to file anyway. Also in the US there are programs designed to encourage delinquent filers to begin filing again, which may include penalty/fee reduction for voluntarily filing. Somehow I suspect Canada has similar programs. If you stand to inherit a sizable amount of money it seems that you should have a history of tax returns in order to minimize the number of questions that are asked should the money come your way. I'd talk to a tax person before consulting an attorney. From the tone of your question the Canadian tax authority hasn't initiated anything against you. You just want to understand the best course of action regarding your tax situation.", "title": "" }, { "docid": "bed338db9cdf1dd0f3be10e06e8adaf3", "text": "\"Yes, this is restricted by law. In plain language, you can find it on the IRS website (under the heading \"\"When Can a Retirement Plan Distribute Benefits?\"\"): 401(k), profit-sharing, and stock bonus plans Employee elective deferrals (and earnings, except in a hardship distribution) -- the plan may permit a distribution when you: •terminate employment (by death, disability, retirement or other severance from employment); •reach age 59½; or •suffer a hardship. Employer profit-sharing or matching contributions -- the plan may permit a distribution of your vested accrued benefit when you: •terminate employment (by death, disability, retirement or other severance from employment); •reach the age specified in the plan (any age); or •suffer a hardship or experience another event specified in the plan. Form of benefit - the plan may pay benefits in a single lump-sum payment as well as offer other options, including payments over a set period of time (such as 5 or 10 years) or a purchased annuity with monthly lifetime payments. Source: https://www.irs.gov/retirement-plans/plan-participant-employee/when-can-a-retirement-plan-distribute-benefits If you want to actually see it in the law, check out 26 USC 401(k)(2)(B)(i), which lists the circumstances under which a distribution can be made. You can get the full text, for example, here: https://www.law.cornell.edu/uscode/text/26/401 I'm not sure what to say about the practice of the company that you mentioned in your question. Maybe the law was different then?\"", "title": "" }, { "docid": "5a33bbdef2b4959cf73e8714d21e6725", "text": "Is there a better vehicle for this than an index fund? Seems like a good choice to me, unless you want to protect it from market risk since it's in essence an emergency fund, in which case maybe you'd want to keep some of it in CD's. Are significant downsides to keeping the money in our name until he needs it? The main downside would be if you had need to dole out more than the maximum annual gift exclusion amount in a single year (currently $14,000), you'd have to report it as a taxable gift on your tax return and it'd count toward your lifetime gift exclusion. You and your wife can each give a gift, and if your brother were married you and your wife could each give to both he and his spouse, so 2-4x the annual gift limit before this becomes an issue. Additionally you can pay medical/education expenses directly and that is not counted toward the annual exclusion. Are there any other considerations that we are overlooking? There's always a risk that gift-giving can create expectation and/or resentment. I'd think you'd want to make instances of giving not sound like something you planned for, but something you are sacrificing for. Not sure what the best strategy is there, every family is different when it comes to dealing with finances.", "title": "" }, { "docid": "cd8357d402dd8084d8d89d0fc81cd792", "text": "Of course, you've already realized that some of that is that smaller estates are more common than larger estates. But it seems unlikely that there are four times as many estates between $10 and $11 million as above that range. People who expect to die with an estate subject to inheritance tax tend to prepare. I don't know how common it is, but if the surviving member of a couple remarries, then the new spouse gets a separate exemption. And of course spouses inherit from spouses without tax. In theory this could last indefinitely. In practice, it is less likely. But if a married couple has $20 million, the first spouse could leave $15 million to the second and $5 million to other heirs. The second spouse could leave $10 million to a third spouse (after remarrying) and another $5 million to children with the first spouse. All without triggering the estate tax. People can put some of their estate into a trust. This can allow the heirs to continue to control the money while not paying inheritance tax. Supposedly Ford (of Ford Motor Company) took that route. Another common strategy is to give the maximum without gift tax each year. That's at least $14k per donor and recipient per year. So a married couple with two kids can transfer $56k per year. Plus $56k for the kids' spouses. And if there are four grandchildren, that's another $112k. Great-grandchildren count too. That's more than a million every five years. So given ten years to prepare, parents can transfer $2 million out of the estate and to the heirs without tax. Consider the case of two wealthy siblings. They've each maxed out their gifts to their own heirs. So they agree to max out their gifts to their sibling's heirs. This effectively doubles the transfer amount without tax implication. Also realize that they can pretransfer assets at the current market rate. So if a rich person has an asset that is currently undervalued, it may make sense to transfer it immediately as a gift. This will use up some of the estate exemption. But if you're going to transfer the asset eventually, you might as well do so when the value is optimal for your purpose. These are just the easy things to do. If someone wants, they can do more complicated things that make it harder for the IRS to track value. For example, the Bezos family invested in Amazon.com when Jeff Bezos was starting it. As a result, his company could survive capital losses that another company might not. The effect of this was to make him fabulously rich and his parents richer than they were. But he won't pay inheritance tax until his parents actually transfer the estate to him (and I believe they actually put it in a charitable trust). If his company had failed instead, he still would have been supported by the capital provided by his parents while it was open (e.g. his salary). But he wouldn't have paid inheritance tax on it. There are other examples of the same pattern: Fred Smith of FedEx; Donald Trump; Bill Gates of Microsoft; etc. The prime value of the estate was not in its transfer, but in working together while alive or through a family trust. The child's company became much more valuable as a result of a parent's wealth. And in two of those examples, the child was so successful that the parent became richer as a result. So the parent's estate does count. Meanwhile, another company might fail, leaving the estate below the threshold despite a great deal of parental support. And those aren't even fiddles. Those children started real companies and offered their parents real investment opportunities. A family that wants to do so can do a lot more with arrangements. Of course, the IRS may be looking for some of them. The point being that the estate might be more than $11 million earlier, but the parents can find ways to reduce it below the inheritance tax exemption by the time that they die.", "title": "" }, { "docid": "127a6a24cda39e7ef42bb5093636183c", "text": "Yes. If the deceased owned the policy, the proceeds are considered part of the estate. In the specific case where the estate is worth (this year 2011) more than $5M, there may be estate taxes due and the insurance would be prorated to pay its portion of that estate tax bill. Keep in mind, the estate tax itself is subject to change. I recall when it was a simple $1M exemption, and if I had a $1M policy and just say $100K in assets, there would have been tax due on the $100K. In general, if there's any concern that one's estate would have the potential to owe estate tax, it's best to have the insurance owned by the beneficiary and gift them the premium cost each year.", "title": "" }, { "docid": "18d1512abda4de57076a40fc825450fd", "text": "You bring up a valid concern. IRAs are good retirement instruments as long as the rules don't change. History has shown that governments can change the rules regarding retirement accounts. As long as you have some of your retirement assets outside of an IRA I think IRAs are good ways to save for retirement. It's not possible to withdraw the money before retirement without penalty. Also, you will be penalized if you do not withdraw enough when you do retire.", "title": "" } ]	fiqa
0726c63adb5fb82cdaf974f9920d34f7	Lowest Interest Options for Short-Term Loan	[ { "docid": "9ea698ba1a4770554825ae07b39c0acb", "text": "\"Also talk to your bank(s) or credit union(s); first one of mine I looked at offers an unsecured loan at 7% variable, and a signature loan at 7.5% fixed, no hidden costs on either. You might do better. Also check store credit. Sears used to offer 1-year-0% financing on appliances if you signed up for the store's card at the time of purchase, and if you have the discipline to reliably pay it off before interest hits that's a hard deal to best. Other stores have offered something similar for major purchases of this sort; do some homework to find out who. (I bought my fridge that way, paying it in month 10.) The \"\"catch\"\" is that many people get distracted and do wind up paying interest, and the store hopes that having an account with them will encourage you to shop there more often.)\"", "title": "" } ]	[ { "docid": "f6a6169d9a0572bb2db48ad625e6a4ea", "text": "A normal FSA also gives you a short term loan: money earmarked is available in entirety immediately, while you repay it every paycheck. This is interest free, and if you time your large planned medical expenses for January, can be a nice cheap loan.", "title": "" }, { "docid": "8669ca18d1876d62225229827919ee84", "text": "\"Depends on how far down the market is heading, how certain you are that it is going that way, when you think it will fall, and how risk-averse you are. By \"\"better\"\" I will assume you are trying to make the most money with this information that you can given your available capital. If you are very certain, the way that makes the most money for the least investment from the options you provided is a put. If you can borrow some money to buy even more puts, you will make even more. Use your knowledge of how far and when the market will fall to determine which put is optimal at today's prices. But remember that if the market stays flat or goes up you lose everything you put in and may owe extra to your creditor. A short position in a futures contract is also an easy way to get extreme leverage. The extremity of the leverage will depend on how much margin is required. Futures trade in large denominations, so think about how much you are able to put to risk. The inverse ETFs are less risky and offer less reward than the derivative contracts above. The levered one has twice the risk and something like twice the reward. You can buy those without a margin account in a regular cash brokerage, so they are easier in that respect and the transactions cost will likely be lower. Directly short selling an ETF or stock is another option that is reasonably accessible and only moderately risky. On par with the inverse ETFs.\"", "title": "" }, { "docid": "2bcdda60f3b4d3e30dc4ab0a0479d764", "text": "\"Dave Ramsey would tell you to pay the smallest debt off first, regardless of interest rate, to build momentum for your debt snowball. Doing so also gives you some \"\"wins\"\" sooner than later in the goal of becoming debt free.\"", "title": "" }, { "docid": "8d9a776d08c206dacd7cec3133072133", "text": "\"With (1), it's rather confusing as to where \"\"interest\"\" refers to what you're paying and where it refers to what you're being paid, and it's confusing what you expect the numbers to work out to be. If you have to pay normal interest on top of sharing the interest you receive, then you're losing money. If the lending bank is receiving less interest than the going market rate, then they're losing money. If the bank you've deposited the money with is paying more than the going market rate, they're losing money. I don't see how you imagine a scenario where someone isn't losing money. For (2) and (3), you're buying stocks on margin, which certainly is something that happens, but you'll have to get an account that is specifically for margin trading. It's a specific type of credit with specific rules, and you if you want to engage in this sort of trading, you should go through established channels rather than trying to convert a regular loan into margin trading. If you get a personal loan that isn't specifically for margin trading, and buy stocks with the money, and the stocks tank, you can be in serious trouble. (If you do it through margin trading, it's still very risky, but not nearly as risky as trying to game the system. In some cases, doing this makes you not only civilly but criminally liable.) The lending bank absolutely can lose if your stocks tank, since then there will be nothing backing up the loan.\"", "title": "" }, { "docid": "eb075ec99e3a7eff8edf3ac57e3f431a", "text": "In france you have several options: A good place to starts with: 1% as of may 2015 interest is low, but's money is 100% liquid (you can withdraw antime). You got slightly superior interest rates, and have to wire at least 45€ a month on it. It gives you lots of advantages if you use it to buy a house. You cannot use the money unless you close the account, so it's not as flexible. You get 2% rates as of may 2015 which is quite good. [If you open this account now, it's only 1% making it not so attractive. Look at Life Insurance Instead.] This one is useless: interest rate is too low. I highly recommend this one. You can open it with 0 cost with several online banks (ing, boursorama, ...) Minimum deposit should be around 1000€. Rate is flexible, but usually higher than what you get with the others. You shouldn't withdraw the money before 8 years (because of taxes, but you can still do it if you need). You can add money on it later if you want. Because of the 8 year duration, it's better to open one as soon as you can, even with the minimum amount. Open an PEL + Livret A + Life insurance. Put the minimum on both PEL + life insurance. Put every thing else on Livret A. If you are 100% sure you don't need some of the livret A money, send it to PEL. [As of 2017, PEL is not so attractive anymore. Bet on the Life Insurance instead, unless your account was open prior to this].", "title": "" }, { "docid": "c1065ee20942a2afea1ec71785bc1d8f", "text": "Makes sense so long as you can afford it while still maintaining at least six months living reserves. The sooner you own outright a decreasing asset the better which should be considered when selecting your loan term. However, with today's low rates and high performing stock market you may want to consider allowing that money to be put to better use. It all depends how risk adverse you are. That emotional aide of this decision and emotions have value, but only you can determine what that value is. So - generally speaking, the sooner you own an asset of decreasing value the better off you are, but in exceptionally low interest rate environments such as today there are, as mentioned, other things you may want to consider. Good luck and enjoy your new ride. Nothing better then some brand new wheels aye.", "title": "" }, { "docid": "25165446ba66ac50fff2c85cdaff029d", "text": "Ben already covered most of this in his answer, but I want to emphasize the most important part of getting a loan with limited credit history. Go into a credit union or community bank and talk to the loan officer there in person. Ask for recommendations on how much they would lend based on your income to get the best interest rate that they can offer. Sometimes shortening the length of the loan will get you a lower rate, sometimes it won't. (In any case, make sure you can pay it off quickly no matter the term that you sign with.) Each bank may have different policies. Talk to at least two of them even if the first one offers you terms that you like. Talking to a loan officer is valuable life experience, and if you discuss your goals directly with them, then they will be able to give you feedback about whether they think a small loan is worth their time.", "title": "" }, { "docid": "d76c232eae67ce53df0a866d6dfaec66", "text": "I would put about a month's worth of expenses in the highest-paying savings account that you find convenient to access. For the rest, I recommend Ally's High-Yield CDs — specifically, the 5-year option. Normally 5 years would be way too long to commit short-term savings to a CD. However, the Ally CDs allow you to break them for a penalty of only two months worth of interest. If you look at the graph below (from when the rates were 3.09% APY), you can see the effective interest rate at every possible time you break the CD early. Doing the math, if you can keep your savings in the account for at least four months, it will outperform any other current FDIC-backed investment that I am aware of, for the length of time the money was invested. (credit: MyMoneyBlog)", "title": "" }, { "docid": "7e33d6cc87fcb2c47d6eb1a0b9675d66", "text": "You may also want to consider short term, low risk investments. Rolling Certificate of Deposits can be good for this. They don't grow like an Index Fund but there's 0 risk and they will grow faster than your bank. For my bank as an example today's rates on my Money Market is 0.10% APY while the lowest CD (90 days) is 0.20% APY with a 5 year going up to 0.90% APY. It's not substantial by any stretch but its secure and the money would just be sitting in my bank otherwise. For more information look at: What is CD laddering and what are its pros and cons?", "title": "" }, { "docid": "7f36c05d8eff0f82f58f3cdf2cc742d0", "text": "The safest investment in the United States is Treasures. The Federal Reserve just increased the short term rate for the first time in about seven years. But the banks are under no obligation to increase the rate they pay. So you (or rather they) can loan money directly to the United States Government by buying Bills, Notes, or Bonds. To do this you set up an account with Treasury Direct. You print off a form (available at the website) and take the filled out form to the bank. At the bank their identity and citizenship will be verified and the bank will complete the form. The form is then mailed into Treasury Direct. There are at least two investments you can make at Treasury Direct that guarantee a rate of return better than the inflation rate. They are I-series bonds and Treasury Inflation Protected Securities (TIPS). Personally, I prefer the I-series bonds to TIPS. Here is a link to the Treasury Direct website for information on I-series bonds. this link takes you to information on TIPS. Edit: To the best of my understanding, the Federal Reserve has no ability to set the rate for notes and bonds. It is my understanding that they can only directly control the overnight rate. Which is the rate the banks get for parking their money with the Fed overnight. I believe that the rates for longer term instruments are set by the market and are not mandated by the Fed (or anyone else in government). It is only by indirect influence that the Fed tries to change long term rates.", "title": "" }, { "docid": "f62e1d6e5427c04a8259add514d801be", "text": "I struggle to see the value to this risk from the standpoint of your mother-in-law. This is not a small amount of money for a single person to lend to a single person ignoring your personal relationship. Right now, using a blended rate of about 8% and a 5 year payment period, your cost on that $50,000 is somewhere in the neighborhood of $11,000 with a monthly payment around $1,014. Using the same monthly payment but paying your MIL at 5% you'll complete the loan about 3.5 months sooner and save about $5,000, she will make about $6,000 in interest over 5 years against a $50,000 outlay. Alternatively, you can just prioritize payments to the more expensive loans. It's difficult to work out a total cost comparison without your expected payoff timelines and amount(s) you're currently paying toward all the loans. I'm sure a couple hours with a couple of spreadsheets could yield a plan that would net you a savings substantially close to the $5,000 you'd save by risking your mother in law's money. A lot of people think personal lending risk is about the relationship between the people involved, but there's more to it than that. It's not about you and your wife separating, it's not about the awkward dinner and conversations if you lose your job. Something might physically happen to you, you could become disabled or die. Right now, that's an extremely diversified and calculated risk taken by a gigantic lender. Unless your mother in law is very wealthy, this is not nearly enough reward to assume this sort of risk (in my opinion). Her risk FAR outpaces your potential five year savings. IF you wanted to pursue this as a means of paying interest to a family member rather than the bank, I'd only borrow an amount I budgeted and intended to pay within this single year. Say $10,000 against the highest interest loan.", "title": "" }, { "docid": "046678fd241d5fd776f2a2c6d324bd7e", "text": "No. It's perhaps a bit obvious, but with the shorter term loan you would be contractually obligated to pay the higher monthly payment. By paying double on the longer loan, you retain the flexibility to pay less. And you would pay less interest if you truly doubled your payment on the longer loan. This is because you'd be paying off more of the principal more quickly. (But you'd also be making a slightly higher payment than on the shorter term loan.) You can play with the amortization calculator at Bankrate to understand this.", "title": "" }, { "docid": "ab0b002019998dadfd61f5d5231a3e07", "text": "Excellent question and it is a debate that is often raised. Mathematically you are probably best off using option #1. Any money that is above and beyond minimum payments earns a pretty high interest rate, about 6.82% in the form of saved interest payments. The problem is you are likely to get discouraged. Personal finance is a lot about behavior, and after working at this for a year, and still having 5 loans, albeit a lower balance, might take a bit of fight out of you. Paying off such a large balance, in a reasonable time, will take a lot of fight. With the debt snowball, you pay the minimum to the student loan, save in an outside account, and when it is large enough, you execute option #2. So a year from now you might only have three loans instead of five. If you behaved exactly the same your balance would be higher after that year then using the previous method. However often one does not behave the same. Because the goals are shorter and more attainable it is easier to delay some gratification. The 8 dollars you are saving in your weekly gas budget, because of low prices, is meaningful when saving for a 4K goal, where it is meaningless when looking at it as a 74K goal. With the 4K goal you are more apt to put that money in your savings, where the 74K goal you might spend it on a latte. For me, the debt snowball worked really well. With either option make sure that excess payments actually go to a reduction in principle not a prepayment of interest. Given this you may be left with no option. For example if method #1 you only prepay interest, you are forced to use option #2.", "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": "a4c2ca6eaa1aa65258cf0cedd61150a0", "text": "\"I don't want to bother with micropayments, and harassing her for monthly payments. Alternative approach to lending her $20K, arranging for her to pay you back $x per month, and having to (as you say) harass her for micropayments. Instead, you give her the $20K, and she sets up a savings account with a monthly direct debit deposit of $x. The bank takes care of the monthly \"\"payments\"\" into the savings account, and at the end of the loan period, you've got your $20K, and instead of the bank making interest off your mom, you make some interest out of the savings account.\"", "title": "" } ]	fiqa
bbe2a67b55ec834e0cf67606ed5465d5	Buy tires and keep car for 12-36 months, or replace car now?	[ { "docid": "e663e64de0fd06bc15a34aaa2cfcacb5", "text": "If the car is in otherwise good shape, it's always less expensive to keep it longer. Think of it this way: you have to buy new tires no matter what. It's just a question of whether or not those new tires are attached to a new car or your current car.", "title": "" }, { "docid": "ba1fbcb5b6de5bf4d70c78c1731ee206", "text": "I don't see how anyone could give you a hard-and-fast formula, unless they know where to get some applicable statistics. Because several factors here are not a straight calculation. If you don't replace the tires but keeping driving the car, what is the increased probability that you will get into an accident because of the bald tires? How much will bald tires vs new tires affect the selling price of the car? Presumably the longer you drive the car after getting new tires, the less increase this will give to the market value of the car. What's the formula for that? If you keep the car, what's the probability that it will have other maintenance problems? Etc. That said, it's almost always cheaper to keep your current car than to buy a new one. Even if you have maintenance problems, it would have to be a huge problem to cost more than buying a new car. Suppose you buy a $25,000 car with ... what's a typical new car loan these days? maybe 5 years at 5%? So your payments would be about $470 per month. If you compare spending $1000 for new tires versus paying $470 per month on a new car loan, the tires are cheaper within 3 months. The principle is the same if you buy with cash. To justify buying a new car you have to factor in the value of the pleasure you get from a new car, the peace of mind from having something more reliable, etc, mostly intangibles.", "title": "" }, { "docid": "a126eabc0702abd8448d4555f3a2125b", "text": "I tend to agree with Rocky's answer. However it sounds like you want to look at this from the numbers side of things. So let's consider some numbers: I'm assuming you have the money to buy the new car available as cash in hand, and that if you don't buy the car, you'll invest it reasonably. So if you buy the new car today, you're $17K out of pocket. Let's look at some scenarios and compare. Assuming: If you buy the new car today, then after 1 year you'll have: If you keep the old car, after 1 year you get: After 2 years, you have: And after 3 years, you're at: Or in other words, nothing depletes the value of your assets faster than buying the new car. After 1 year, you've essentially lost $5K to depreciation. However, over the short term the immediate cost of the tires combined with the continued depreciation of the old car do reduce your purchasing power somewhat (you won't be able to muster $25K towards a new car without chipping in a bit of extra cash), and inflation will tend to drive the cost of the new car up as time goes on. So the relative gap between the value of your assets and the cost of the new car tends to increase, though it stays well below the $5k that you lose to depreciation if you buy the new car immediately. Which is something that you could potentially spin to support whichever side you prefer, I suppose. Though note that I've made some fairly pessimistic assumptions. In particular, the current U.S. inflation rate is under 1%, and a new car may depreciate by as much as 25% in the first year while older cars may depreciate by less than the 8% assumed. And I selected the cheapest new car price cited, and didn't credit the tires with adding any value to your old car. Each of those aspects tends to make continuing to drive the older car a better option than buying the new one.", "title": "" }, { "docid": "df86779cf6997e4ea645f202520efc49", "text": "It depends how detailed you want to get in your calculation, but fundamentally, 1K < 25K. On a very basic level, divide the cost (less what you sell it for) by the time you'll have the car for. If you junk it, $1K/12 month = $83/month to buy tires to have a car for a year. If you sell it for $1K, then it become $0/month. (Plus other maintenance, etc..., obviously). If you pay 25K and keep the new car for ten years and sell it for nothing, it becomes roughly $208/month (plus maintenance). If you want to get more accurate, there are a lot of variables you can take into account--time cost of money, financing, maintenance costs of different vehicle types, etc...", "title": "" }, { "docid": "6b9547bbb145fba640b8a5633ba5deea", "text": "Would you buy this used car, in its current condition but with new tires, for the price of the tires? If so, buy the tires.", "title": "" }, { "docid": "d656c57d1205ae4ee389bed0fd9b70d4", "text": "New tires will increase the resale value of the car; while not by the full cost of the tires, it will not be entirely a sunk cost. You'd need to factor that in and find out how much the new tires increase the resale value of the car to determine how much they would truly cost you. However, I suspect they would cost you less than a $25,000 car a year early would. That new car would cost some amount over time - it sounds like you buy a new car every 8 years or so? So it would cost you $25/8 = $3.3k/year. That would, then, be the overall cost of the new car a year early - $3.3k (as it would mean one less year out of your old car, so assuming it was also $25k/8 year or similar, that year becomes lost and thus a cost).", "title": "" }, { "docid": "3a0485f78810e7db67128ae2e457166d", "text": "There are a few factors I like to consider when I'm reasoning financially over my households cars. How many KMs will the car travel each year because I like to factor in how often tires will need to be changed, how much tires for my models cost as well as how gas efficient they are. Knowing how much the car is driven and in what environmental/road conditions is also important factors to know because that will help guestimate possible repairs cost. Also possible taxes should be taken in to consideration. For example a few years ago I had a diesel Citroen C5 that had yearly taxes of roughly 500$. The replacement costs only 150$ a year in taxes. So switching cars 3 years early would have saved me 1050$ in taxes. So some information on possible taxes, how far you drive each year, what environmental conditions, type of driving (daily long rides or just short etc..) as well as the fuel efficiency of both cars would help to better calculate your costs for say three scenarios. Car change in 12, 24 and 32 months respectively.", "title": "" }, { "docid": "bd5930583bb29a301015383439a583da", "text": "If You use the car regulary, I don't think that driving on the bald tires for 3 years is a reasonable option. Have You considered buying used tires? Those will be cheaper and will last till You get to replace the car.", "title": "" } ]	[ { "docid": "15ba43220578c9b495c2baeeb42ca862", "text": "\"I would split the savings as you may need some of it quickly for an emergency. At least 1/2 should be very liquid, such as cash or MMA/Checking. From there, look at longer term CDs, from 30 day to 180 day, depending upon your situation. Don't be surprised if by the time you've saved the money up, your desire for the car will have waned. How many years will it take to save up enough? 2? 5? 10? You may want to review your current work position instead, so you'll make more and hopefully save more towards what you do want. Important: Be prepared for the speed bumps of life. My landlord sold the house I was renting out from under me, as I was on a month-to-month contract. I had to have a full second deposit at the ready to put down when renting elsewhere, as well as the moving expenses. Luckily, I had done what my tax attorney had said, which is \"\"Create a cushion of liquid assets which can cover at least three months of your entire outgoing expenses.\"\" The Mormon philosophy is to carry at least one year's worth of supplies (food, water, materials) at all times in your home, for any contingency. Not Mormon, not religious, but willing to listen to others' opinions. As always, YMMV. Your Mileage May Vary.\"", "title": "" }, { "docid": "cd7306a60bf14d01085ce39d5567c46d", "text": "Two adages come to mind. Never finance a depreciating asset. If you can't pay cash for a car, you can't afford it. If you decide you can finance at a low rate and invest at a higher one, you're leveraging your capital. The risk here is that your investment drops in value, or your cash flow stops and you are unable to continue payments and have to sell the car, or surrender it. There are fewer risks if you buy the car outright. There is one cost that is not considered though. Opportunity cost. Since you've declared transportation necessary, I'd say that opportunity cost is worth the lower risk, assuming you have enough cash left after buying a car to fund your emergency fund. Which brings me to my final point. Be sure to buy a quality used car, not a new one. Your emergency fund should be able to replace the car completely, in the case of a total loss where you are at fault and the loss is not covered by insurance. TLDR: My opinion is that it would be better to pay for a quality, efficient, basic transportation car up front than to take on a debt.", "title": "" }, { "docid": "792f34a8a0feaa870a3ffcb996e3ab3c", "text": "The stupid question nobody asked: how mechanically inclined are you? I buy used cars, but then again I can work on them (I am building a new engine to my specs for one of my cars). Replacing a head gasket in a Subaru would be less than $200 for me, so I would find someone who blew his and offer $1000-1500 for the car if it is one of the models I like. The reality of buying an used car is that you are buying someone's else problems. How much do you know about that specific car model, its quirks, and what usually goes bad on them? For instance, it is a fact most people who buy a BMW 3 series flog them, so expect an used one to have been abused by someone trying to pick up girls by acting like he is a racer. A 5 series, on the other hand, would have a better life. Then some cars tend to rust on certain areas of the body. On the other hand I have seen Hyundai Elantras take a lot of abuse -- no oil change in 3 years -- and keep on ticking. Yes, you need to do some research on new cars, but old ones require even more. If you are going to save money buying used, make sure to spend time and research the options and their hidden costs. And learn how to check a car and have a feel for how much you will spent on repairing/maintaining it. And what you are willing to give up on your first car: is having a working AC that important? How about power windows? If you do buy a used car, try to put $100-200 aside every month, as if you are doing car payments. That will be your emergency and downpayment-for-next-car money. No matter what you buy, remember all you want on a new car is reliability and fuel efficiency. And, how much do you need a car right now? If you have to ride 30minutes to work in pouring rain and then be talking to customers, maybe a car worth having. But, where I live, a lot of people ride bicycles to work and back or use public transportation. I would trust getting into my car right now and drive 5h, and yet I take the bus every day (I like saving money on fuel and parking fees).", "title": "" }, { "docid": "23fd7f9dc7b35a42c2e519670245b8b1", "text": "I've read online that 20% is a reasonable amount to pay for a car each month - Don't believe everything you read on the internet. But, let me ask, does your current car have zero expense? No fuel, no oil change, no repairs, no insurance? If the 20% is true, you are already spending a good chunk of it each month. My car just celebrated her 8th birthday. And at 125,000 miles, needed $3000 worth of maintenance repairs. The issue isn't with buying the expensive car, you can buy whatever you can afford, that's a personal preference. It's how you propose to budget for it that seems to be bad math. Other members here have already pointed out that this financial decision might not be so wise.", "title": "" }, { "docid": "abeb0190ccb8b7150937156566d9cf42", "text": "\"This is my opinion as a car nut. It depends on what you want out of a car. For your situation (paying cash, want to keep the car long-term but also save money) I recommend seriously considering a slightly used vehicle, maybe 2 or 3 years old, or a \"\"certified pre-owned vehicle\"\". Reasons: Much less expensive than a brand new car because the first two years have the biggest depreciation hit. Cars come with a 4-year warranty, so a 3 year old car will still be in warranty. Yes, a certified pre-owned car will have a bit of a premium compared to a private-party used car, but the peace of mind of knowing it's in good shape is worth the extra cost considering you want to keep it long term. Consumer Reports will have good advice on the best values in used cars.\"", "title": "" }, { "docid": "a3fd13bf1e34c6ca404f8523b7ca2062", "text": "\"As cars age, the amount of deprecation tends to decrease. You have already lost between 19 and 17K on the car in the past 3.5 years. You can't lose that much on that car ever again! First because it is not worth that much. Second, because even if the engine blows up, or it is totaled you can always get about $300-$400 for it. If you trade this car for a newer model the same exact scenario is likely to happen again. In three years (or so) the car will lose half its value. If you happen to stick the same price point, and are comfortable with $5000/year going \"\"out the window\"\", then it might be time to trade up. You can get a decent idea of what your car will be worth in the 2.5 years by seeing what a 2006 with 116K miles on it. One option is to keep driving it after it is paid off. With putting a little money into it, and having it detailed every once in a while it can feel like a pretty sweet ride for many years and miles to come. Even if you have maintenance costs, you won't have a car payment. How sweet would that be?\"", "title": "" }, { "docid": "0dde5983c3293f42747f39062339274b", "text": "Which way would save the most money? Paying of the car today would save the most money. Would you borrow money at 20% to put it in a savings account? That's effectively what she is doing by not paying off the car. If it were me, I would pay off the car today, and add the car payment to my savings account each month. If the car payment is $400, that's $1,500 a month that can be saved, and the $12k will be back in 8 months. That said - remember that this is your GIRLFRIEND, not a spouse. You are not in control (or responsible for) her finances. I would not tell her that she SHOULD do this - only explain it to her in different ways, and offer advice as to what YOU would do. Look together at how much has been paid in principal and interest so far, how much she's paying in interest each month now, and how much she'll pay for the car over the life of the loan. (I would also encourage her not to buy cars with a 72-month loan, which I'm guessing is how she got here). In the end, though, it's her decision.", "title": "" }, { "docid": "b4ee97c68281a1e2de37b6a52989a6a1", "text": "If you lease a car, you are paying for the depreciation of a certain number of miles, even if you don't actually use those miles. Since you know you will be well under the standard number of miles when your lease is up, and you already know that you want to keep the car, buying is better than leasing.", "title": "" }, { "docid": "13f8f990eb2701f4c3ca892e40f200d7", "text": "A loan that does not begin with at least a 20% deposit and run through a term of no longer than 48 months is the world's way of telling you that you can't afford this vehicle. Consumer-driven cars are rapidly depreciating assets. Attenuating the loan to 70 months or longer means that payments will not keep up with normal depreciation, thus trapping the buyer in an upside down loan for the entire term.", "title": "" }, { "docid": "2bf62c09fe325de41096aaf3e8b4b8f3", "text": "\"Does your planning include contingencies for Can you afford the late fees, insurance increases, bad credit hits and all the other downsides when this goes bad? Why does she NEED a new car on lease? Personally? I'd go for option B) Do what it takes to have her OWN a car. Why not just have her get a car that costs IN ENTIRE the $3k that would be used for a down payment on a lease? Maybe add a bit of your own money \"\"for old times sake\"\" to the pile? Or a small loan to get to where she can get a usable, dependable car? Say, a $3-5k loan in your name that she's responsible for the payments. $3-10k can get a very dependable old car. 10 great cars for 6k or less Everyone else has been burned by her - for whatever reason. No idea what the reasons are, but she seems to be unable to pay her bills. Why would this time be any different? Your name on a car + someone who can't pay bills = a bad proposition. I would LOVE to help anyone who's been important in my life. Including MY x-wife. But I wouldn't agree to this deal unless I KNEW that I could 100% cover the costs when things go bad - because at this point, odds are they will.\"", "title": "" }, { "docid": "833192fa2624bd4fca23f6210fe60398", "text": "It is almost never going to be more economical to buy a new car versus repairing your current car. If you want a new car, that is justification enough.", "title": "" }, { "docid": "2877ea212c9e3863024c98fb6b9f6fa0", "text": "In a perfect world scenario you would get a car 2-5 years old that has very little mileage. One of the long standing archaic rules of the car world is that age trumps mileage. This was a good rule when any idiot could roll back an odometer. Chances are now that if you rolled your odometer back the car was serviced somewhere, had inspection or whatever and it is on a report. If seller was found to do this they could face jail time and obviously now their car is almost worthless. Why do I mention this? Because you can take a look at 2011 cars. Those with 20K miles go for just a little more than those with 100K miles. As an owner you will start incurring heavy maintenance costs around 100K on most newer cars. By buying cars with lower mileage, keeping them for a year or two, and reselling them before they get up in miles, you can stay in that magic area where you can drive a pretty good car for $200-300 a month. Note that this takes work on both the buying and selling side and you often need cash to get these cars (dealers are good about siphoning really good used cars to employees/friends). This is a great strategy for keeping costs down and car value up but obviously a lot of people try to do this and it takes work and you have to be willing to settle sometimes on a car that is fine, but not exactly what you want. As for leasing this really gets into three main components: If you are going to do EVERYTHING at a dealership and you want something new or newish you might as well lease. At least then you can shop around for apples to apples. The problem with buying a new/used car from the dealers in perpetuity isn't the buying process. It is the fact that they will screw you on the trade-in. A car that books for 20K may trade-in for 17K. Even if the dealer says they are giving you 20K, then they make you pay list price for the car. I have many many times negotiated a price of a car and then wife brought in our car separately and I can count on ZERO fingers how many times that the dealership honored both sides of the negotiations. Not only did they not honor them but most refused to talk with us after they found out. With a lease you don't have to worry about losing this money in the negotiations. You might pay a little extra (or not since you can shop around) but after the lease you wash your hands of the car. The one caveat to this is the high-end market. When you are talking your Acura, Mercedes, Lexus... It is probably better to buy and trade in every couple years. You lose too much equity by leasing, where it won't cover the trade-in gap and cost of your money being elsewhere. I have a friend that does this and gets a slightly better car every 2-3 years with same monthly payment. Another factor to consider is the price of a car. If your car will be worth over $15K at time of sale you are going to have a hard time selling it by owner. When amounts get this high people often need financing. Yes they can get personal financing but most people are too lazy to do this. So the number of used car buyers on let's say craigslist are way way fewer as you start getting over $10-12K and I have found $15K to be kind of that magic amount. The pro-buy-used side is easy. Aim for those cars around $12-18K that are out there (and many still under warranty). These owners will have issues finding cash buyers. They will drop prices somewhere between book price and dealer trade-in. In lucky cases where they need cash maybe below dealer trade-in. And remember these sellers aren't dealing with 100s let alone 10 buyers. You drive the car for 3-4 years. Maybe it is $7-10K. But now you will get much much closer to book price because there will be far more buyers in this range.", "title": "" }, { "docid": "751399e0e631d9deba48c25b9d4e5cfa", "text": "When I was in that boat a few years ago, I went for the car first. My thoughts: If I get the car first, I'm guaranteed to have a car that runs well. That makes it more convenient to commute to any job, or for social functions. I ended up dropping about $20k into a car (paid cash, I don't like being in debt). I chose to buy a really nice car, knowing it will last for many years to come - I'm expecting to not replace it for about 10 years from the purchase. I would urge you to consider paying in full for the car; dumping $20k+ is a lot, and there are plenty of nice cars out there in the $10-20k range that will work just fine for years to come. One benefit of paying in full is that you don't have a portion of your income tied into the car loan. The main reason I chose not to go for the house first had more to do with the difference in commitment. A home mortgage is a 30-year commitment on a large chunk of your income. With the job market and housing markets both currently working against you, it's better to wait until you have a large safety net to fall into. For example, it's always recommended to have several months worth of living expenses in savings. Compared to renting, having 6 or more months of mortgage payments + utilities + insurance + property taxes + other mandatory expenses (see: food, gas) comes out to a significant amount more that you should have saved (for me, I'm looking at a minimum of about $20k in savings just to feel comfortable; YMMV). Also, owning a house always has more maintenance costs than you will predict. Even if it's just replacing a few light bulbs at first, eventually you'll need something major: an appliance will die, your roof will spring a leak, anything (I had both of those happen in the first year, though it could be bad luck). You should make sure that you can afford the increased monthly payments while still well under your income. Once you're locked in to the house, you can still set aside a smaller chunk of your income for a new car 5-10 years down the road. But if you're current car is getting down to it's last legs, you should get that fixed up before you lock yourself in to an uncomfortable situation. Don't be in too much of a hurry to buy a house. The housing market still has a ways to go before it recovers, and there's not a whole lot to help it along. Interest rates may go up, but that will only hurt the housing market, so I don't expect it to change too much for the next several months. With a little bit of sanity, we won't have another outrageous housing bubble for many years, so houses should remain somewhat affordable (interest rates may vary). Also keep in mind that if you pay less that 20% down on the house, you may end up with some form of mortgage interest, which is just extra interest you'll owe each month.", "title": "" }, { "docid": "13c784beb80c23267dd7392e8d5b5027", "text": "For a lease, your payment is a function of sale price minus residual value. If the car has a low residual value then the lease payments will be higher. If it has a high residual value then lease payments will be lower but the purchase price at the end of the lease will be higher (potentially even higher than the KBB of the car). There is no gaming the system. Whether you buy now or lease now and buy later, you will be paying for the entire car. Calculate the payments in both scenarios with appropriate interest rates/money factors, sale price, and residual value. This will demonstrate there is no free lunch to be had here. Also, don't forget that financing the vehicle after a three year lease will probably mean a higher interest rate than if you were to finance it all now. With a purchase now you will likely get more favorable financing terms and be able to talk them down on sale price. Leasing will not allow such flexibility generally. Tldr No, that's not how it works. If you plan on owning the car for the duration of a loan (e.g. 5 years) it will be cheaper to just finance now.", "title": "" }, { "docid": "224406f6bceb88a7eb6490251a5f4211", "text": "The are a couple of explanations that I can think of; though for determining exactly what is different you will want to print out both returns and compare them line by line to see how they differ. If the company grossed up your income to account for the taxes on housing (possibly by paying the additional withholding), you may be just benefiting from them estimating your tax rate. This can especially be the case if your only work was the three month internship. They would have to assume your salary was for the entire year. There is an earned income tax credit for low wage earners that you may have qualified for (it would depend your specific circumstances if you meet the criteria). But that credit for a range of income actually pays out more the more you earn (to encourage working that extra hour instead of reducing benefit because you had another hour of employment). As for the housing subsidy itself, while the value is quite high the IRS considers that to be a taxable benefit that the employer provided you and so it needs to be added to your W-2 wages. $8k a month seems quite high, but I don't know the quality of the apartment you were provided and what the going rates are in the area. Given that you said you worked for a major tech company, I can imagine that you might have been working in an area with high rents. If the employer did gross up your paycheck so as to cover your taxes, that $24k would also include that extra tax payment (e.g. if the employer paid $8k in additional taxes for you, then the housing cost that they directly paid were $16k).", "title": "" } ]	fiqa
45081108164efb55a7b2e00fce6bfdbe	Calculating required rate of return for an income-generating savings account	[ { "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": "1840c175462eafdd1a0a67584ec8a85a", "text": "You are looking for the Internal Rate of Return. If you have a spreadsheet like Microsoft Excel you can simply put in a list of the transactions (every time money went in or out) and their dates, and the spreadsheet's XIRR function will calculate a percentage rate of return. Here's a simple example. Investment 1 was 100,000 which is now worth 104,930 so it's made about 5% per year. Investment 2 is much more complicated, money was going in and out, but the internal rate of return was 7% so money in that investment, on average, grew faster than money in the first investment.", "title": "" }, { "docid": "185dbae572642a73b52c95ff09ec426e", "text": "\"For 3X, it's about 114, and for 4X, 144, which naturally, is twice 72. These are close, back of napkin, results. With smart phone apps offering scientific calculators, you should get comfortable just taking the nth root of a number for a more precise answer. Update in response to Brick's comment. The rule of 72 says that (n)(y)=72 to double your money. It answers both questions, how much time do I need, given a rate, and how much return do I need, given a time? Logic tells me that if 72 is the number to double, 144 is the 4X. But I'm a math guy, and my logic might not be logical to OP. So - Let's take the 20th root of 4. This is the key to use. 4, (hit key) 20, equals. The result is 1.07177 or 7.177%. And this is the precise rate you'd need to quadruple your money in 20 years) Now (n)(y)= 20* 7.177 = 143.55 which rounds to 144. \"\"Rule of 144\"\" to quadruple your money. This now answers OP's question, \"\"How to derive a Rule of X\"\" for a return other than doubling. One more example? I want 10X my money. Of course I need the initial guess to enter one calculation. People like 8%, in general. It's a bit below the 10% long term S&P return, and a good round number. The Rule of 72 says 9 years to double, so, 18 years is 4X, and 36 years is 8X. For my initial calculation, I'll use 40 years. The 40th root of 10. I get 5.925% (Again the precise rate that gives 10 fold over 40 years) and multiplying this by 40, I get a \"\"Rule of 237\"\" which I'm tempted to round to 240. At 6%, 237/6= 39.5 yrs, 1.06^39.5 = 9.99 At 6%, 240/6= 40.0 yrs, 1.06^40.0 = 10.29 You can see that you lose some accuracy for the sake of a number that's easier to remember, and manipulate. 72 to double is pretty darn accurate, so I'll stick with \"\"Rule of 237\"\" to get 10X my money. To close, the purpose of these rules is to create the tool that lets you perform some otherwise tough calculations away from any electronic device. Of course I know how to use logs, and in real life I'm paid to explain them to students who are typically glad when that chapter is over. I've shown above how the \"\"Rule of X\"\" can be formulated with a power/root key, which, for most people, is simpler. Ironically, log calculations as @jkuz offered, force a continuous compounding which may not be desired at all. It would give a result of 230 for my 10X return example, and the following (using the first equation he offered) - At 6%, 230/6= 38.3 yrs, 1.06^38.3 = 9.31 which is further away from the desired 10X than my 237 or rounded 240.\"", "title": "" }, { "docid": "841f67a51fe5b559c4ce1db46e0b290f", "text": "The point of a total return index is that it already has accounted for the capital gains + coupon income. If you want to calculate it yourself you'll have to find the on-the-run 10y bond for each distinct period then string them together to calc your total return. Check XLTP if they have anything", "title": "" }, { "docid": "a334ed8f76a17b3941232013b5b9d235", "text": "Aah... well, then in that case you should actually integrate a monte carlo return scenario with your equity values. Ultimately it's not going to matter what your RFR is because it's going to be equal in both cases, so you're really just talking about return differences. Again, it would be impractical for these two options. Maybe just look at cash outlay - an amortization table of sorts, and that's how you'd calculate the breakeven point. You could inflate the unspent cash difference by a small margin (perhaps 0.5% to account for something like a CD or an ARS) but the big difference is going to be the interest rate with respect to a mortgage vs. a perpetual cash payment of rent that never attains any real value.", "title": "" }, { "docid": "e87cf009a427c288022fcb9eaf253bed", "text": "You are comparing a risk-free cost with a risky return. If you can tolerate that level of risk (the ups and downs of the investment) for the chance that you'll come out ahead in the long-run, then sure, you could do that. So the parameters to your equation would be: If you assume that the risky returns are normally distributed, then you can use normal probability tables to determine what risk level you can tolerate. To put some real numbers to it, take the average S&P 500 return of 10% and standard deviation of 18%. Using standard normal functions, we can calculate the probability that you earn more than various interest rates: so even with a low 3% interest rate, there's roughly a 1 in 3 chance that you'll actually be worse off (the gains on your investments will be less than the interest you pay). In any case there's a 3 in 10 chance that your investments will lose money.", "title": "" }, { "docid": "44f9f76999c87d2d86618c849ab259aa", "text": "Well, one can easily have rates below -100%. Suppose I start with $100, and end up with $9 after a year. What was my rate of return? It could be -91%, -181%, -218%, or -241%, or something else, depending on the compounding method. We always have that the final amount equals the initial amount times a growth factor G, and we can express this using a rate r and a day count fraction T. In this case, we have T = 1, and B(T) = B(0) * 0.09, so: So, depending on how we compound, we have a rate of return of -91%, -181%, -218%, or -241%. This nicely illustrates that:", "title": "" }, { "docid": "8006d851062e84cea059ce200dfbe31e", "text": "such analysis helps you keep track of the percentage of income that you invest You could apply 1:1:1 ratio. i.e spend 1/3, save 1/3 and invest 1/3. Hope that helps", "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": "d0a026f08202c815affb879b92cd8e3f", "text": "I hope that there are no significant differences between the things you list once the formulas for compounding interest are understood. I will, again, lay out these formulas below. First, definition of the variables: R means Total Return ratio. The sum of all money you get, both dividends (or interest payments) and return of initial capital. I is a ratio. It is the percent (10.4%) divided by 100 (0.104) then added to one (1.104). P means the number of periods in which the interest rate is paid and compounded. R = I^P I = R^(1/P) P = log(R) / log(I) Once you have R you multiply it by the amount of your initial investment to find out how much total money is returned. For simplicity the following amounts are approximate: 2 = 1.104^7 1.104 = 2^(1/7) 7 = log(2) / log(1.104) So to double your money in seven years you need a yearly interest rate of 10.4, if compounded yearly.", "title": "" }, { "docid": "19cee018f7319046d2a12068ecb47663", "text": "There is a fundamental flaw in this statement: For example, a home bought cash $100,000 would have to be sold $242,726.247 30 years later just to make up with inflation, and that would be a 0% return. You forgot to deduct rent from your monthly carrying costs. That changes the calculations significantly. Your calculations are valid ONLY if you were to buy a house, and let it sit empty, which is unlikely. Either you are going to live in it, and save yourself $1000 a month in rent, or, you are going to rent it out to someone, and earn an income of $1000 a month. Either way, you're up $1000 a month and this needs to be included.", "title": "" }, { "docid": "d2fbc5dc05a3d6d3b2e81994ca5c3e12", "text": "I believe the following formula provides a reasonable approximation. You need to fill in the following variables: The average annual return you need on investing the 15% = (((MP5 - MP20) 12) + (.0326 * .95 * PP / Y)) / (PP .15) Example assuming an interest rate of 4% on a 100K home: If you invest the $15K you'll break even if you make a 9.86% return per year on average. Here's the breakdown per year using these example numbers: Note this does not consider taxes.", "title": "" }, { "docid": "dc859b3b25fca1555b0fd5f6dddb8d2b", "text": "As Chris pointed out: If your expenses are covered by the income exactly, as you have said to assume, then you are basically starting with a $40K asset (your starting equity), and ending with a $200K asset (a paid for home, at the same value since you have said to ignore any appreciation). So, to determine what you have earned on the $40K you leveraged 5x, wouldn't it be a matter of computing a CAGR that gets you from $40K to $200K in 30 years? The result would be a nominal return, not a real return. So, if I set up the problem correctly, it should be: $40,000 (1 + Return)^30 = $200,000 Then solve for Return. It works out to be about 5.51% or so.", "title": "" }, { "docid": "e381aeb1110d8b207c75ddc922101ea8", "text": "Interesting. The answer can be as convoluted/complex as one wishes to make it, or back-of-envelope. My claim is that if one starts at 21, and deposits 10% of their income each year, they will likely hit a good retirement nest egg. At an 8% return each year (Keep in mind, the last 40 years produced 10%, even with the lost decade) the 10% saver has just over 15X their final income as a retirement account. At 4% withdrawal, this replaces 60% of their income, with social security the rest, to get to nearly 100% or so replacement. Note - I wrote an article about Social Security Benefits, showing the benefit as a percent of final income. At $50K it's 42%, it's a higher replacement rate for lower income, but the replacement rate drops as income rises. So, the $5000 question. For an individual earning $50K or less, this amount is enough to fund their retirement. For those earning more, it will be one of the components, but not the full savings needed. (By the way, a single person has a standard deduction and exemption totaling $10150 in 2014. I refer to this as the 'zero bracket.' The next $8800 is taxed at 10%. Why go 100% Roth and miss the opportunity to fund these low or no tax withdrawals?)", "title": "" }, { "docid": "3a5e579b13be145ba602a0f1c0448c12", "text": "\"It can be pretty hard to compute the right number. What you need to know for your actual return is called the dollar-weighted return. This is the Internal Rate of Return (IRR) http://en.wikipedia.org/wiki/Internal_rate_of_return computed for your actual cash flows. So if you add $100 per month or whatever, that has to be factored in. If you have a separate account then hopefully your investment manager is computing this. If you just have mutual funds at a brokerage or fund company, computing it may be a bunch of manual labor, unless the brokerage does it for you. A site like Morningstar will show a couple of return numbers on say an S&P500 index fund. The first is \"\"time weighted\"\" and is just the raw return if you invested all money at time A and took it all out at time B. They also show \"\"investor return\"\" which is the average dollar-weighted return for everyone who invested in the fund; so if people sold the fund during a market crash, that would lower the investor return. This investor return shows actual returns for the average person, which makes it more relevant in one way (these were returns people actually received) but less relevant in another (the return is often lower because people are on average doing dumb stuff, such as selling at market bottoms). You could compare yourself to the time-weighted return to see how you did vs. if you'd bought and held with a big lump sum. And you can compare yourself to the investor return to see how you did vs. actual irrational people. .02, it isn't clear that either comparison matters so much; after all, the idea is to make adequate returns to meet your goals with minimum risk of not meeting your goals. You can't spend \"\"beating the market\"\" (or \"\"matching the market\"\" or anything else benchmarked to the market) in retirement, you can only spend cash. So beating a terrible market return won't make you feel better, and beating a great market return isn't necessary. I think it's bad that many investment books and advisors frame things in terms of a market benchmark. (Market benchmarks have their uses, such as exposing index-hugging active managers that aren't earning their fees, but to me it's easy to get mixed up and think the market benchmark is \"\"the point\"\" - I feel \"\"the point\"\" is to achieve your financial goals.)\"", "title": "" }, { "docid": "478bf5c86f175e786a9a7ca05f38691a", "text": "\"There is a very simple calculation that will answer the question: Is the expected ROI of the 401K including the match greater than the interest rate of your credit card? Some assumptions that don't affect the calculation, but do help illustrate the points. You have 30 years until you can pull out the 401K. Your credit card interest rate is 20% compounded annually. The minimum payoffs are being disregarded, because that would legally just force a certain percentage to credit card. You only have $1000. You can either pay off your credit card or invest, but not both. For most people, this isn't the case. Ideally, you would simply forego $1000 worth of spending, AND DO BOTH Worked Example: Pay $1000 in Credit Card Debt, at 20% interest. After 1 year, if you pay off that debt, you no longer owe $1200. ROI = 20% (Duh!) After 30 years, you no longer owe (and this is pretty amazing) $237,376.31. ROI = 23,638% In all cases, the ROI is GUARANTEED. Invest $1000 in matching 401k, with expected ROI of 5%. 2a. For illustration purposes, let's assume no match After 1 year, you have $1050 ($1000 principal, $0 match, 5% interest) - but you can't take it out. ROI = 5% After 30 years, you have $4321.94, ROI of 332% - assuming away all risk. 2b. Then, we'll assume a 50% match. After 1 year, you have $1575 ($1000 principle, $500 match, 5% interest) - but you can't take it out. ROI = 57% - but you are stuck for a bit After 30 years, you have $6482.91, ROI of 548% - assuming away all risk. 2c. Finally, a full match After 1 year, you have $2100 ($1000 principle, $1000 match, 5% interest) - but you can't take it out. ROI = 110% - but again, you are stuck. After 30 years, you have $8643.89, ROI of 764% - assuming away all risk. Here's the summary - The interest rate is really all that matters. Paying off a credit card is a guaranteed investment. The only reason not to pay off a 20% credit card interest rate is if, after taxes, time, etc..., you could earn more than 20% somewhere else. Note that at 1 year, the matching funds of a 401k, in all cases where the match exceeded 20%, beat the credit card. If you could take that money before you could have paid off the credit card, it would have been a good deal. The problem with the 401k is that you can't realize that gain until you retire. Credit Card debt, on the other hand, keeps growing until you pay it off. As such, paying off your credit card debt - assuming its interest rate is greater than the stock market (which trust me, it almost always is) - is the better deal. Indeed, with the exception of tax advantaged mortgages, there is almost no debt that has an interest rate than is \"\"better\"\" than the market.\"", "title": "" } ]	fiqa
dbebb683336d9f161f2f221e60826ec9	Are there any disadvantages to DHA Investment Properties?	[ { "docid": "2f0d259305893efee065306911adb1f5", "text": "\"A quick online search for \"\"disadvantages of defence housing australia investment properties\"\" turns up a several articles that list a few possible disadvantages. I can't vouch for these personally because I'm not familiar with the Australian rental market, but they may all be things to keep in mind. I quote verbatim where indicated.\"", "title": "" }, { "docid": "47b2652f89efc36174db9dce4176ff7d", "text": "I think the strongest reason against DHA purchases (I don't consider them investments) is points 3 and 5 mentioned above. The resale market is only to other investors that are convinced its a good investment.If you can't sell to owner occupiers, you've just removed the MAJORITY of your potential pool of people to resell to - this has a devastating effect on your ability to make any capital gain from your investment - if you're not chasing capital gain...be sure to understand why! (see article below)The marketing people will have you believe that DHA is a great investment from a yield perspective...maybe so, I haven't crunched the numbers. But in my opinion, I would wonder - who cares?Yield is important to ensure you can hold the property, but if there is no capital growth and you can't sell it for a profit or release some equity to buy the next investment, then you've just put a massive road block in your wealth building path.I am at the asset accumulation phase of my investing journey, so my opinion is skewed towards capital growth investments. Unless you have a sizable equity base already, in my opinion $4-5 Million in debt free assets, then you should be looking for capital growth assets...not high yield.This article from Your Investment Property magazine, although now dated, gives a good example to illustrate my point on why capital growth is the sensible strategy during the asset building phase of your wealth creation journey: Why capital growth is still king I think the strongest reason against DHA purchases (I don't consider them investments) is points 3 and 5 mentioned above. The resale market is only to other investors that are convinced its a good investment. If you can't sell to owner occupiers, you've just removed the MAJORITY of your potential pool of people to resell to - this has a devastating effect on your ability to make any capital gain from your investment - if you're not chasing capital gain...be sure to understand why! (see article below) The marketing people will have you believe that DHA is a great investment from a yield perspective...maybe so, I haven't crunched the numbers. But in my opinion, I would wonder - who cares? Yield is important to ensure you can hold the property, but if there is no capital growth and you can't sell it for a profit or release some equity to buy the next investment, then you've just put a massive road block in your wealth building path. I am at the asset accumulation phase of my investing journey, so my opinion is skewed towards capital growth investments. Unless you have a sizable equity base already, in my opinion $4-5 Million in debt free assets, then you should be looking for capital growth assets...not high yield. This article from Your Investment Property magazine, although now dated, gives a good example to illustrate my point on why capital growth is the sensible strategy during the asset building phase of your wealth creation journey: Why capital growth is still king", "title": "" }, { "docid": "44d9e801412c8dffd0f173e6102c166f", "text": "Along with the above reasons, the fact that DHA are under investigation by the Federal Police, should be a red flag to any potential investor. The Federal Police aren't called in over parking fines. The rules that are in place for effective and appropriate management appear to have been compromised. I would like to see DHA's marketing people explain why the Department of Finance called in the Feds. To clarify further, with any investment, the potential investor must satisfy beyond any doubt whether there's a problem with an individual or with the way the organisation is managed as a whole. Look at the Big Four banks. To complete the research I suggest wait until DHA release an appropriate public statement (hopefully a sensible one that is honest- but don't hold your breath). I can see parallels with the recent scandal with HSU. When management is being led away in handcuffs it may be too late to change your mind.", "title": "" }, { "docid": "294a49c90910b8cd894159827d7b7d5d", "text": "Well, I am an investor/ Lessor under DHA properties. Oflate, DHA lost it identity as a Govt agency and try to imitate a worst (not the best) real eastate agent. Every year rental valuation is a drama or waste of time and money to lessor. They pull down the rent by 10 to 22% and ask for a secondary valuation for no reasons. They don't even agree with market evidence and start bullying or black mailing tactics to force you to aceept a below market rent or the threat of third review , a very expensive review shared 50% by lessor and rest the poor tax payers! The thir review also badly influenced by DHA by submitting biased valuations and thereby destroying the independence of valuation. The API appointed valuer neither follow the DHA gudie nor the API guide and also ignore the market reality and take the average rent for the area. You also losse 14 to 18% as management fees paid to DHA. Selling also a problem and its high time the CWG and the Minster in charge of the DHA must institute an independent investigation to expose the potential nexus between the valuers and the DHA and how the lessor (a self funded retiree, pensioners and others). I already lodged a complaint with Ombudsman and waiting for a reply. There are 14 Lessors all in a Private street (Only DHA leased property in that street) near 213 Ray rd Epping 2121 that are leased to DHA for more than 10 years. Please note most of those Lessors almost lost $10000 per year because DHA under cut the rent to them when they paid me the market rent for many years. DHA by mistake send the rent paid to all. We have called for the details of rent paid to all the 14 lessors in that private street from 2008 todate under the Freedom of Information Act and waiting.", "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": "935cd924ed52f16c8409aaec99f643b2", "text": "Not really my field but this is how I see the impact Disadvantages for banks : not being able to chose where they park assets/cash they have been trusted with which mean lower income from investing those disadvantage for banks shareholders : less earnings disadvantage for the economy : harder criteria to lend, lower loan growth advantage for the economy : (theoretically) less risks of liquidity crunch and financial crisis", "title": "" }, { "docid": "2c44d62e3ce8df5859c2428ecb00f5a3", "text": "Note that many funds just track indexes. In that case, you essentially don't have to worry about the fund manager making bad decisions. In general, the statistics are very clear that you want to avoid any actively managed fund. There are many funds that are good all-in-one investments. If you are in Canada, for example, Canadian Couch Potato recommends the Tangerine Investment Funds. The fees are a little high, but if you don't have a huge investment, one of these funds would be a good choice and appropriate for 100% of your investment. If you have a larger investment, to the point that Tangerine's MER scares you a little, you still may well look at a three or four fund (or ETF) portfolio. You may choose to use an actively-managed fund even though you know there's virtually no chance it'll beat a fund that just tracks an index, long-term. In that case, I'd recommend devoting only a small portion of your portfolio to this fund. Many people suggest speculating with no more than 10% of your combined investment. Note that other people are more positive on actively-managed funds.", "title": "" }, { "docid": "6789c456e285764ac0c13da528ce8bc0", "text": "Investing only in one industry may be problematic as it is highly correlated. There are factor outside your (or anyones) knowledge which may affect all the industry: If you are familiar with the industry it may happen that you work in that (ignore rest of paragraph if this is not the case). In such case you are likely to have problems at work (frozen salary, no bonus, position terminated) and you need to liquidate the investments at that point (see many advice regarding ESPP). Depending on your field you may have some inside knowledge so even if you would took a position without it you may need to somehow prove it. On the other hand diversifying the investment might reduce the volatility of investment. Rise in oil will cause problems for air industry but will be a boom for oil industry etc. In this way you smooth the grow of the investments. Investing part of portfolio into specific industry may make more sense. It still possibly worth to avoid it at the beginning investor may have trouble to beat the market (for example according to behavioural economics you are exposed to various biases, or if markets are efficient then prices most likely already take into account any information you may have). (I'm still new to all this so it's mostly based on what I read rather then any personal experience. Also a standard disclaimer that this is not an investment, or any other, advice and I'm not licensed financial advisor in any jurisdiction)", "title": "" }, { "docid": "89d4b3d5f9ba6b37bb8a4966cf06ef82", "text": "I wrote this in another thread but is also applicable here. In general people make some key mistakes with property: Not factoring in depreciation properly. Houses are perpetually falling down, and if you are renting them perpetually being trashed by the tenants as well - particularly in bad areas. Accurate depreciation costs can often run in the 5-20% range per year depending on the property/area. Add insurance to this as well or be prepared to lose the whole thing in a disaster. Related to 1), they take the index price of house price rises as something they can achieve, when in reality a lot of the house price 'rise' is just everyone having to spend a lot of money keeping them standing up. No investor can actually track a house price graph due to 1) so be careful to make reasonable assumptions about actual achievable future growth (in your example, they could well be lagging inflation/barely growing if you are not pricing in upkeep and depreciation properly). Failure to price in the huge transaction costs (often 5%+ per sale) and capital gains/other taxes (depends on the exact tax structure where you are). These add up very fast if you are buying and selling at all frequently. Costs in either time or fees to real estate rental agents. Having to fill, check, evict, fix and maintain rental properties is a lot more work than most people realise, and you either have to pay this in your own time or someone else’s. Again, has to be factored in. Liquidity issues. Selling houses in down markets is very, very hard. They are not like stocks where they can be moved quickly. Houses can often sit on the market for years before sale if you are not prepared to take low prices. As the bank owns your house if you fail to pay the mortgage (rents collapse, loss of job etc) they can force you to fire sale it leaving you in a whole world of pain depending on the exact legal system (negative equity etc). These factors are generally correlated if you work in the same cities you are buying in so quite a lot of potential long tail risk if the regional economy collapses. Finally, if you’re young they can tie you to areas where your earnings potential is limited. Renting can be immensely beneficial early on in a career as it gives you huge freedom to up sticks and leave fast when new opportunities arise. Locking yourself into 20 yr+ contracts/landlord activities when young can be hugely inhibiting to your earnings potential. Without more details on the exact legal framework, area, house type etc it’s hard to give more specific advise, but in general you need a very large margin of safety with property due to all of the above, so if the numbers you’re running are coming out close (and they are here), it’s probably not worth it, and you’re better of sticking with more hands off investments like stocks and bonds.", "title": "" }, { "docid": "e364a6ed990c880fc1cf8755a3093a6f", "text": "I used to own a few investment properties, so I'm pretty familiar with this. As MrChrister mentions, lenders see investment mortgages as higher risk. People who fall into financial trouble are much more likely to let their investment properties go than their personal residence. Consequently, the interest rates and downpayment requirements are generally higher. Typically a mortgage for an investment property will require 20% down, vs. as low as 3-5% down for a personal residence. With excellent credit and some shopping around, you could probably do 10% down. Interest rates are typically about a half-percent higher as well. You'll also find that the more investment properties you have, the harder it becomes to finance new ones. Banks look at debt-to-income ratios to determine if you are over extended. Typically banks like to see that your housing payments are less than 20% or so of your income. However, with rental properties, housing payments generally account for far more than 20% of your rental income. Other income you have can offset that, but after buying 2-3 houses or so, your DTI generally creeps into the range where lenders are uncomfortable lending to you anymore. This is why you'll find that many rental properties are bought on land contracts with owner financing rather than with mortgages.", "title": "" }, { "docid": "8f65e96af1e26f3449880727069e817d", "text": "\"No, there are neither advantages nor disadvantages. I'll take on this question from an accounting standpoint. Financial statements, the tools at which the market determines (amongst other things) the value of a stock, are converted at year end to the home currency (see 1.1.3).If Company A has revenue of 100,000 USD and the conversion to EUR is .89, revenue in the European market will be reported as 89,000 EUR. These valuations, along with ratios, analysis, and \"\"expert\"\" opinions determine if a person should own shares in Company A. Now, if we're talking about comparing markets this is a entirely different question. Example: Should I buy stock of Company A, who is in the American market (as an European)? Should I buy stock of Company B, who is in the European market (as an American)? I would recommend this as additional level of diversification of your portfolio to inlcude possible large inflation of either the currency. The possible gains of this foreign exchange may be greater if one or the other currency becomes weak.\"", "title": "" }, { "docid": "4d43af4b1dc8286b7debd6994eaf2ae9", "text": "Basically there are 2 ways you can make money from an investment, through income (eg: rent or dividends) and through the price of the investment going up (capital growth or gains). Most people associate negative gearing with investment properties but it can be done with shares and other investments where you borrow money to buy the investment and it produces an income of some sort. If the investment does not produce an income then you cannot negative gear it. Using a property as an example (in Australia), if all your expenses each month (loan interest payments, council and water rates, insurance and/or strata, advertising and management fees, depreciation, and maintenance expense) are greater than your income (rent), then you are negative gearing the investment property. This is a monthly loss on your investment which can be used to offset and reduce the amount of tax you pay during the year. So most people negative gearing an investment property will get a nice sum back when they do their tax returns. The problem with negative gearing is that you have to lose money in order to save some tax. So as an example, if you are on a marginal tax rate of 30%, for every $1 you lose from the investment property you will save 30c in tax. If your marginal tax rate is 45% then will save 45c in tax for every $1 lost on the investment property. Thus negative gearing becomes more tax effective the higher your income (and tax bracket). But you are still losing money overall. The problem is that most novice investors buy an investment property for the main purpose of reducing their taxes. This can be dangerous because the main reason to buy any investment should be that you consider it to be a good investment, not to save you tax. Because if the investment is not a good one, then you will not only lose money on the income side but also on the capital side. Negative gearing should be looked at as a bonus or additional benefit when chosing a good investment to buy, not as the reason to buy the investment.", "title": "" }, { "docid": "cd7a5171dedfacb077ee12a843c6a8ce", "text": "Danger. The affidavit is a legal document. Understand the risk of getting caught. If you are planning on using the condo to generate income the chances that you default on the loan are higher than an owner occupied property. That is why they demand more down payment (20%+) and charge a higher rate. The document isn't about making sure you spend 183+ nights a year in the property, it is making sure that it isn't a business, and you aren't letting a 3rd party live in the property. If you within the first year tell the mortgage company to send the bill to a new address, or you change how the property is insured, they will suspect that it is now a rental property. What can they do? Undo the loan; ask for penalty fee; limit your ability to get a mortgage in the future; or a percentage of the profits How likely is it? The exact penalty will be in the packet of documents you receive. It will depend on which government agency is involved in the loan, and the lenders plan to sell it on the secondary market. It can also depend on the program involved in the sale of the property. HUD and sister agencies lock out investors during the initial selling period, They don't want somebody to represent themselves as homeowner, but is actually an investor. Note: some local governments are interested not just in non-investors but in properties being occupied. Therefore they may offer tax discounts to residents living in their homes. Then they will be looking at the number of nights that you occupy the house in a year. If they detect that you aren't really a resident living in the house, that has tax penalties. Suggestion: If you don't want to wait a year buy the condo and let the loan officer know what your plan is. You will have to meet the down payment and interest rate requirements for an investment property. Your question implies that you will have enough money to pay the required 20% down payment. Then when you are ready buy the bigger house and move in. If you try and buy the condo with a non-investment loan you will have to wait a year. If you try and pay cash now, and then get a home equity loan later you will have to admit it is a rental. And still have to meet the investor requirements.", "title": "" }, { "docid": "e7efd44b6df5887ee927806d2e802c81", "text": "\"For instance he is recommending moving money into HYD which seems to have a higher risk at an average return ( for this asset class )ABHFX seems to have a higher return at a lower risk. Often [his recommendations] are on the lower end of best performing funds in the class. Historical Mutual Fund performance has little to no predictive power for future performance so this shouldn't be an immediate disqualification. Some good starting questions for you to evaluate a manager: Does this mean it's a mistake to use UBS (or any bank limited in its fund offerings from other institutions) as the \"\"wealth management\"\" institution? All wealth management institutions have restrictions on possible investments. Obviously, if your relative can't invest in the funds she wants that is an issue. Do these [Morningstar] ratings mean anything at all? This has been studied pretty carefully and the academic consensus appears to be that they have no consistant predictive power. Kräussl and Sandelowsky wrote a particularly comprehensive paper on the subject.\"", "title": "" }, { "docid": "dae84622294f488ae7fff5c11d07754a", "text": "That looks like a portfolio designed to protect against inflation, given the big international presence, the REIT presence and TIPS bonds. Not a bad strategy, but there are a few things that I'd want to look at closely before pulling the trigger.", "title": "" }, { "docid": "4962c84d620697faf5573c70b312f640", "text": "REIT is to property as Mutual Fund is to stock. In others words, a REIT spreads your risk out over a greater number of properties, making the return safer, at the expense of both upside and downside risk. On average, both would average out to be the same. That said, you have a much wider range of outcomes when investing in a single property. As with stocks, over the long haul, unless you think you can somehow beat the market, divirsification is usually considered the better move. Technically, your ROI is the same, but your beta is much better in a REIT.", "title": "" }, { "docid": "2672f85e33b709f4dbbffabf875d2251", "text": "I strongly recommend you to invest in either stocks or bonds. Both markets have very strict regulations, and usually follow international standards of governance. Plus, they are closely supervised by local governments, since they look to serve the interests of capital holders in order to attract foreign investment. Real estate investment is not all risky, but regulations tend to be very localized. There are federal, state/county laws and byelaws, the last usually being the most significant in terms of costs (city taxes) and zoning. So if they ever change, that could ruin your investment. Keeping up with them would be hard work, because of language, legal and distance issues (visiting notary's office to sign papers, for example). Another thing to consider is, specially on rural distant areas, the risk of forgers taking your land. In poorer countries you could also face the problem of land invasion, both urban and rural. Solution for that depends on a harsh (fast) or socially populist (slow) local government. Small businesses are out of question for you, frankly. The list of risks (cash stealing, accounting misleading, etc.) is such that you will lose money. Even if you ran the business in your hometown it would not be easy right?", "title": "" }, { "docid": "c517ef7ba52c41d23492de2239036a19", "text": "Investing in property hoping that it will gain value is usually foolish; real estate increases about 3% a year in the long run. Investing in property to rent is labor-intensive; you have to deal with tenants, and also have to take care of repairs. It's essentially getting a second job. I don't know what the word pension implies in Europe; in America, it's an employer-funded retirement plan separate from personally funded retirement. I'd invest in personally funded retirement well before buying real estate to rent, and diversify my money in that retirement plan widely if I was within 10-20 years of retirement.", "title": "" }, { "docid": "b79409d008694846d99a18cb967006dd", "text": "yeah - the point is why should any foreign investor trust you with their money? just because Bangladesh might have a hot housing market, doesn't make you a reliable or trustworthy partner. Maybe if you were an established and reputable real estate investor this post might get traction.", "title": "" } ]	fiqa
fcacec24517b1b732ac577436a9f5670	How to get a down payment for your next home? Use current home as the down payment on the new one?	[ { "docid": "ce454d430bb2b09d8cd5bf04a2243067", "text": "This is of course a perfectly normal thing to happen. People trade up to a bigger house every day. When you've found a bigger house you want to move to and a buyer for your existing one, you arrange 'closing dates' for both i.e. the date on which the sale actually happens. Usually you make them very close, either on the same day or with an overlap of a few weeks. You use the equity (i.e. the difference between the house value and the mortgage) in the old house as the down payment on the new house. You can't of course use the part of the old house that is mortgaged. If the day you buy the new and sell the old is the same, your banks and lawyers do everything for you on that day. If there is an overlap then you need something called 'bridge financing' to cover the period when you own two houses. Banks are used to doing this, and it's not really that expensive when you take into account all the other costs of moving house. Talk to them for details. As a side note, it is generally reckoned not to be worth buying a house if you only intended to live there one or two years. The costs involved in the process of buying, selling and moving usually outweigh any gains in house value. You may find yourself with a higher down payment if you rent for a year or two and save up a down payment for your 'bigger' house instead.", "title": "" }, { "docid": "d19970a098e698738f59751a42ff9e9d", "text": "\"What you're looking at is something called \"\"Bridge-Financing\"\". Essentially, it allows you to borrow your down-payment from the bank, using your old home as collateral. The interest rate varies, but if you get the bridge from the same institution as your new mortgage, they will often be a bit flexible. You take possession of the new home, and begin mortgage payments on it normally. When the old home is sold, the bridge is paid off. Note that the deposit on signing for the new house will still have to be cash. All bets are off if you are talking about a NEW new home, as builders usually require advance payments during the build.\"", "title": "" }, { "docid": "67faeff9e3ce897091306276edad0266", "text": "\"I know you've clarified that you're in the US, but in case anyone else comes across this question: in the UK this is completely normal (including if you still have outstanding mortgage on your current home). We end up with long \"\"chains\"\" of buyers and sellers all completing / moving on the same day so that the proceeds from one sale can be used as the downpayment on the next.\"", "title": "" } ]	[ { "docid": "7dac3bea905e716cc1763cc0cedb785b", "text": "I could be wrong, but I doubt you're going to be able to roll the current mortgage into a new one. The problem is that the bank is going to require that the new loan is fully collateralized by the new house. So the only way that you can ensure that is if you can construct the house cheaply enough that the difference between the construction cost and the end market value is enough to cover the current loan AND keep the loan-to-value (LTV) low enough that the bank is secured. So say you currently owe $40k on your mortgage, and you want to build a house that will be worth $200k. In order to avoid PMI, you're going to have to have an LTV of 80% or less, which means that you can spend no more than $160k to build the house. If you want to roll the existing loan in, now you have to build for less than $120k, and there's no way that you can build a $200k house for $120k unless you live in an area with very high land value and hire the builders directly (and even then it may not be possible). Otherwise you're going to have to make up the difference in cash. When you tear down a house, you are essentially throwing away the value of the house - when you have a mortgage on the house, you throw away that value plus you still owe the money, which is a difficult hole to climb out of. A better solution might be to try and sell the house as-is, perhaps to someone else who can tear down the house and rebuild with cash. If that is not a viable option (or you don't want to move) then you might consider a home equity loan to renovate parts of the house, provided that they increase the market value enough to justify the cost (e.g. modernize the kitchen, add on a room, remodel bathrooms, etc. So it all depends on what the house is worth today as-is, how much it will cost you to rebuild, and what the value of the new house will be.", "title": "" }, { "docid": "c8a32bd41ce337dbffc94eb86141d43a", "text": "In response to one of the comments you might be interested in owning the new home as a rental property for a year. You could flip this thinking and make the current home into a rental property for a period of time (1 year seems to be the consensus, consult an accountant familiar with real estate). This will potentially allow for a 1031 exchange into another property -- although I believe that property can't then be a primary residence. All potentially not worth the complication for the tax savings, but figured I'd throw it out there. Also, the 1031 exchange defers taxes until some point in the future in which you finally sell the asset(s) for cash.", "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": "b381fce7dd29bb532e1caeb0c23caf36", "text": "\"Let me summarize your question for you: \"\"I do not have the down payment that the lender requires for a mortgage. How can I still acquire the mortgage?\"\" Short answer: Find another lender or find more cash. Don't overly complicate the scenario. The correct answer is that the lender is free to do what they want. They deem it too risky to lend you $1.1M against this $1.8M property, unless they have $700k up front. You want their money, so you must accept their terms. If other lenders have the same outlook, consider that you cannot afford this house. Find a cheaper house.\"", "title": "" }, { "docid": "a1ebbc5a056464b41ab9e59830944367", "text": "\"You are \"\"pool[ing] the sales from both houses as downpayment on the new house.\"\" But they are going to pay you rent. Your question as it stands, just opens more questions. What, exactly is the ownership of the new house? If your's (and your wife's) was the money a gift? Ignoring the gift, if that's what it is, and if the in-law suite is 25% of the house value, you have a rental. You claim 25% of the expenses, including property tax and mortgage interest, along with 25% of the utilities, unless their part has its own meters. That's a start, if you add details, I may edit my answer. (Not to be pedantic, but whose parents are they. They can't be \"\"our in-laws,\"\" can they?)\"", "title": "" }, { "docid": "c89cf1c6e8abe3866cae50a53b47197a", "text": "we have little money in cash for a down-payment This is a red flag to me. If you have little money in cash for a down-payment, how are you supposed to be a landlord too? You could try is to do a lease to own from your Dad. Get a renter into the other home for at least a year or more and then close on the house once your financial situation improves. You still have the same problem of being a landlord. Another option is to receive a gift letter from your Dad since he is gifting the money on the home. It might extend your closing a little bit so you can get an appraisal done and loan application. This to me is the most sane option.", "title": "" }, { "docid": "b74742b32b99f9bd32cd60cc84d3206f", "text": "\"Often the counter-party has obligations with respect to timelines as well -- if your buying a house, the seller probably is too, and may have a time-sensitive obligation to close on the deal. I'm that scenario, carrying the second mortgage may be enough to make that deal fall through or result in some other negative impact. Note that \"\"pre-approval\"\" means very little, banks can and do pass on deals, even if the buyer has a good payment history. That's especially true when the economy is not so hot -- bankers in 2011 are worried about not losing money... In 2006, they were worried about not making enough!\"", "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": "e0f3195d0e9409f2aa92e1fb02bc0eef", "text": "\"There are actually a few questions you are asking here. I will try and address each individually. Down Payment What you put down can't really be quantified in a dollar amount here. $5k-$10k means nothing. If the house costs $20k then you're putting 50% down. What is relevant is the percent of the purchase price you're putting down. That being said, if you go to purchase a property as an investment property (something you wont be moving into) then you are much more likely to be putting a down payment much closer to 20-25% of the purchase price. However, if you are capable of living in the property for a year (usually the limitation on federal loans) then you can pay much less. Around 3.5% has been my experience. The Process Your plan is sound but I would HIGHLY suggest looking into what it means to be a landlord. This is not a decision to be taken lightly. You need to know the tenant landlord laws in your city AND state. You need to call a tax consultant and speak to them about what you will be charging for rent, and how much you should withhold for taxes. You also should talk to them about what write offs are available for rental properties. \"\"Breaking Even\"\" with rent and a mortgage can also mean loss when tax time comes if you don't account for repairs made. Financing Your first rental property is the hardest to get going (if you don't have experience as a landlord). Most lenders will allow you to use the potential income of a property to qualify for a loan once you have established yourself as a landlord. Prior to that though you need to have enough income to afford the mortgage on your own. So, what that means is that qualifying for a loan is highly related to your debt to income ratio. If your properties are self sustaining and you still work 40 hours a week then your ability to qualify in the future shouldn't be all that impacted. If anything it shows that you are a responsible credit manager. Conclusion I can't stress enough to do YOUR OWN research. Don't go off of what your friends are telling you. People exaggerate to make them seem like they are higher on the socioeconomic ladder then they really are. They also might have chicken little syndrome and try to discourage you from making a really great choice. I run into this all the time. People feel like they can't do something or they're to afraid so you shouldn't be able to either. If you need advice go to a professional or read a book. Good luck!\"", "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": "9ea9a62265fcf4949947d15397964d13", "text": "\"The only way to \"\"roll\"\" debt into a home purchase is to have sufficient down payment. Under the \"\"new\"\" lending rules that took effect in Canada earlier this year, you must have at least 5% of the purchase price as a down payment. If you have $60,000 in additional debt, the total amount of mortgage still cannot be greater than 95% of the purchase price. Below is an example. Purchase price of home $200,000. Maximum mortgage $190,000 (95% of purchase price) Total outside debt $60,000 That means the mortgage (other than the current debt of $60k) can only be $130,000 This means you would need a down payment of $70,000. Also keep in mind that I have not included any other legal fees, real estate commissions, etc in this example. Since it is safe to assume that you do not have $70k available for a down payment, renting and paying down the debt is likely the better route. Pay off the credit card(s) first as they have the higher interest amount. Best of luck!\"", "title": "" }, { "docid": "a192109b0e014b9a0563b0d88a7bb6d3", "text": "You can definitely get access to cash during the selling of your home and buying of a new one. Think of the home sale and buy as two distinct transactions. As long as your mortgage qualification doesn't depend on all the proceeds from the first sale being rolled into the new mortgage, you'll be fine.", "title": "" }, { "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": "d1849bb66104f42c71b3be6293247b9f", "text": "Is used cmc markets application (via my bank at the time) to gain leveraged exposure to the financial markets, with no tax payable as its classed as gambling. I am sure there are other websites/application offering the same. The results weren't particularly pretty for me, but the concept is sound imo.", "title": "" }, { "docid": "58860fe0de482e4d2eb3464f2934d2b9", "text": "\"Clearing means processing unsettled transactions. Specifically - all the money transfers between the banks, in this case. Clearing Bank for RMB business means that all RMB transactions will be cleared through that specific bank. If bank A in Hong Kong gets a check drawn on Bank B in Hong Kong, and the check is in RMB - A will go to the BoC with the check and will get the money, and BoC will take the money from B. That obviously requires both A and B have accounts with BoC. \"\"Sole\"\" clearing house means there's only one. I.e.: in our example, A and B cannot settle the check through C where they both happen to have accounts, or directly with each other. They MUST utilize the services of BoC.\"", "title": "" } ]	fiqa
fbd8d9ac95efa0e73ca76e9aa9a97ff0	Should retirement fund be equal to amount of money needed for financial independence?	[ { "docid": "bd1c2de074d2347fc982182af0792e6e", "text": "\"It depends what you mean. Finance Independence and Retirement Early (FI/RE) are two overlapping ideas. If you plan to retire early and spend the same amount of money every year (adjusted for inflation), then you need to save twenty-times your yearly spending to satisfy the 4% Safe Withdrawal rule of thumb. Carefully notice I say \"\"yearly spending\"\" and not income. I'm unaware how it is in Pakistan, but in America, people who retire in their sixties tend to reduce their spending by 30%. This is for a host of reasons like not eating out as much, not driving to work, paid off mortgages, and their children being adults now. In this type of profile, a person needs to save 17.5x yearly spending. This numbers presume a person will only use their built assets as an income source. Any programs like a government pension acting as a safety net. If you factor those in, the estimates above become smaller.\"", "title": "" }, { "docid": "63b244d1a98fc9f19affcb3534ffbda8", "text": "I want to know ideally how much should a person save for retirement funds? A person should save enough such that your total retirement resources will equal the amount you personally need for a comfortable retirement at the point in time when the person desires to retire. If you want to retire at 40, you may need to save quite a lot each year. If you want to retire at 70, you may need to save less each year. If you will have a pension, you may wish to save somewhat less than someone who won't have a pension. The same is true for Social Security (or your local equivalent). I am getting a feeling retirement funds is equal to financial independence because one can live without needing to borrow money from anyone. Sort of, but it depends on your goals. Some who are financially independent never choose to retire, but choose jobs without regard to financial need.", "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": "996b732e38a70f90a62d98cbc95f0edd", "text": "A person who always saves and appropriately invests 20% of their income can expect to have a secure retirement. If you start early enough, you don't need anything close to 20%. Now, there are many good reasons to save for things other than just retirement, of course. You say that you can save 80% of your income, and you expect most people could save at least 50% without problems. That's just unrealistic for most people. Taxes, rent (or mortgage payments), utilities, food, and other such mandatory expenses take far more than 50% of your income. Most people simply don't have the ability to save (or invest) 50% of their income. Or even 25% of their income.", "title": "" }, { "docid": "07879fbd5435f8dae93d0837a5e1bb5e", "text": "As a general rule, diversification means carrying sufficient amounts in cash equivalents, stocks, bonds, and real estate. An emergency fund should have six months income (conservative) or expenses (less conservative) in some kind of cash equivalent (like a savings account). As you approach retirement, that number should increase. At retirement, it should be something like five years of expenses. At that time, it is no longer an emergency fund, it's your everyday expenses. You can use a pension or social security to offset your effective monthly expenses for the purpose of that fund. You should five years net expenses after income in cash equivalents after retirement. The normal diversification ratio for stocks, bonds, and real estate is something like 60% stocks, 20% bonds, and 20% real estate. You can count the equity in your house as part of the real estate share. For most people, the house will be sufficient diversification into real estate. That said, you should not buy a second home as an investment. Buy the second home if you can afford it and if it makes you happy. Then consider if you want to keep your first home as an investment or just sell it now. Look at your overall ownership to determine if you are overweighted into real estate. Your primary house is not an investment, but it is an ownership. If 90% of your net worth is real estate, then you are probably underinvested in securities like stocks and bonds. 50% should probably be an upper bound, and 20% real estate would be more diversified. If your 401k has an employer match, you should almost certainly put enough in it to get the full match. I prefer a ratio of 70-75% stocks to 25-30% bonds at all ages. This matches the overall market diversification. Rebalance to stay in that range regularly, possibly by investing in the underweight security. Adding real estate to that, my preference would be for real estate to be roughly a quarter of the value of securities. So around 60% stocks, 20% bonds, and 20% real estate. A 50% share for real estate is more aggressive but can work. Along with a house or rental properties, another option for increasing the real estate share is a Real Estate Investment Trust (REIT). These are essentially a mutual fund for real estate. This takes you out of the business of actively managing properties. If you really want to manage rentals, make sure that you list all the expenses. These include: Also be careful that you are able to handle it if things change. Perhaps today there is a tremendous shortage of rental properties and the vacancy rate is close to zero. What happens in a few years when new construction provides more slack? Some kinds of maintenance can't be done with tenants. Also, some kinds of maintenance will scare away new tenants. So just as you are paying out a large amount of money, you also aren't getting rent. You need to be able to handle the loss of income and the large expense at the same time. Don't forget the sales value of your current house. Perhaps you bought when houses were cheaper. Maybe you'd be better off taking the current equity that you have in that house and putting it into your new house's mortgage. Yes, the old mortgage payment may be lower than the rent you could get, but the rent over the next thirty years might be less than what you could get for the house if you sold it. Are you better off with minimal equity in two houses or good equity with one house? I would feel better about this purchase if you were saying that you were doing this in addition to your 401k. Doing this instead of your 401k seems sketchy to me. What will you do if there is another housing crash? With a little bad luck, you could end up underwater on two mortgages and unable to make payments. Or perhaps not underwater on the current house, but not getting much back on a sale either. All that said, maybe it's a good deal. You have more information about it than we do. Just...be careful.", "title": "" }, { "docid": "a8136e0b36283542987257724559274e", "text": "\"The standard interpretation of \"\"can I afford to retire\"\" is \"\"can I live on just the income from my savings, never touching the principal.\"\" To estimate that, you need to make reasonable guesses about the return you expect, the rate of inflation, your real costs -- remember to allow for medical emergencies, major house repairs, and the like when determining you average needs, not to mention taxes if this isn't all tax-sheltered! -- and then build in a safety factor. You said liquid assets, and that's correct; you don't want to be forced into a reverse mortgage by anything short of a disaster. An old rule of thumb was that -- properly invested -- you could expect about 4% real return after subtracting inflation. That may or may not still be correct, but it makes an easy starting point. If we take your number of $50k/year (today's dollars) and assume you've included all the tax and contingency amounts, that means your nest egg needs to be 50k/.04, or $1,250,000. (I'm figuring I need at least $1.8M liquid assets to retire.) The $1.5M you gave would, under this set of assumptions, allow drawing up to $60k/year, which gives you some hope that your holdings would mot just maintain themselves but grow, giving you additional buffer against emergencies later. Having said that: some folks have suggested that, given what the market is currently doing, it might be wiser to assume smaller average returns. Or you may make different assumptions about inflation, or want a larger emergency buffer. That's all judgement calls, based on your best guesses about the economy in general and your investments in particular. A good financial advisor (not a broker) will have access to better tools for exploring this, using techniques like monte-carlo simulation to try to estimate both best and worst cases, and can thus give you a somewhat more reliable answer than this rule-of-thumb approach. But that's still probabilities, not promises. Another way to test it: Find out how much an insurance company would want as the price of an open-ended inflation-adjusted $50k-a-year annuity. Making these estimates is their business; if they can't make a good guess, nobody can. Admittedly they're also factoring the odds of your dying early into the mix, but on the other hand they're also planning on making a profit from the deal, so their number might be a reasonable one for \"\"self-insuring\"\" too. Or might not. Or you might decide that it's worth buying an annuity for part or all of this, paying them to absorb the risk. In the end, \"\"ya pays yer money and takes yer cherce.\"\"\"", "title": "" }, { "docid": "f0acf326fbdfa250e70c646ec968b6f6", "text": "I think rather than take a percentage out, I focus on getting a total amount I consider appropriate for my emergency fund. Then as for retirement, I do at least what my employer matches, up to the contribution limit. For example my personal retirement plan in the US has an annual max contribution of $5000. Once I have my 6 to 12 month emergency fund (in a pretty liquid form) and a fully funded retirement, I want to concentrate on building wealth via investments or increasing the quality of my life by spending. Summary answer is: no percentage for emergency, just get to a total amount you feel comfortable. Then whatever percentage will allow you to make the most of employer matching and make your retirement fully funded.", "title": "" }, { "docid": "4e6792d81a3496a978744ac6a70587f4", "text": "\"What does this mean and how do you do it? Consider that there are may be more than a few different objectives when it comes to investing: Each of these is a different objective that can have different timelines, objectives for the money as well as possible accounts and investment choices. In a sense the question could be stated as \"\"How much money do you need and when do you need it?\"\" Is it trying to figure out how much money you hope to have for retirement, or does it include short term expenses The objective could be retirement but doesn't have to be. The short term expenses can be included in various ways. The retirement funds could include what kind of method would be used to make sure expenses can be met as if one is looking at retirement just a few years away the \"\"short term expenses\"\" may come up as part of the retirement living.\"", "title": "" }, { "docid": "590852108b061575c8815783e9c46e36", "text": "\"My suggestion would be that you're looking at this the wrong way, though for good reasons. Once you are a family, you should - and, in most cases I've seen, will - think of things differently than you do now. Right now, your post above is written from a selfish perspective. Not to be insulting, and not implying selfish is a bad thing - I don't mean it negatively. But it is how you're defining this problem: from a self-interested, selfish point of view. \"\"Fair\"\" and \"\"unfair\"\" only have meaning from this point of view; something can only be unfair to you if you come from a self-centered viewpoint. Try to think of this from a family-centric viewpoint, and from your significant other's point of view. You're absolutely right to want both of you to be independent financially as far as is possible; but think about what that means from all three points of view (your family's, yours, and hers)? Exactly what it means will depend on the two of you separately and together, but I would encourage you to start with a few basics that make it likely you'll find a common ground: First of all, ensure your significant other has a retirement account of her own that is funded as well as yours is. This will both make life easier if you split up, and give her a safety net if something happens to you than if you have all of the retirement savings. I don't know how your country manages pensions or retirement accounts, but figure out how to get her into something that is as close to equal to yours as possible. Make sure both of you have similar quality credit histories. You should both have credit cards in your own names (or be true joint owners of the accounts, not just authorized users, where that is possible), and both be on the mortgage/etc. when possible. This is a common issue for women whose spouse dies young and who have no credit history. (Thanks @KateGregory for reminding me on this one) Beyond that, work out how much your budget allows for in spending money for the two of you, and split that equally. This spending money (i.e., \"\"fun money\"\" or money you can do whatever you like with) is what is fundamentally important in terms of financial independence: if you control most of the extra money, then you're the one who ultimately has control over much (vacations, eating out, etc.) and things will be strained. This money should be equal - whether it is literally apportioned directly (each of you has 200 a month in an account) or simply budgeted for with a common account is up to you, whatever works best for your personal habits; separate accounts works well for many here to keep things honest. When that money is accounted for, whatever it is, split the rest of the bills up so that she pays some of them from her income. If she wants to be independent, some of that is being in the habit of paying bills on time. One of you paying all of the bills is not optimal since it means the other will not build good habits. For example, my wife pays the warehouse club credit card and the cell phone bill, while I pay the gas/electric utilities. Whatever doesn't go to spending money and doesn't go to the bills she's personally responsible for or you're responsible for (from your paycheck) should go to a joint account. That joint account should pay the larger bills - mortgage/rent, in particular - and common household expenses, and both of you should have visibility on it. For example, our mortgage, day-care costs, major credit card (which includes most of our groceries and other household expenses) come from that joint account. This kind of system, where you each have equal money to spend and each have some household responsibilities, seems the most reasonable to me: it incurs the least friction over money, assuming everyone sticks to their budgeted amounts, and prevents one party from being able to hold power over another. It's a system that seems likely to be best for the family as a unit. It's not \"\"fair\"\" from a self-centered point of view, but is quite fair from a family-centered point of view, and that is the right point of view when you are a family, in my opinion. I'll emphasize here also that it is important that no one party hold the power, and this is set up to avoid that, but it's also important that you not use your earning power as a major arguing point in this system. You're not \"\"funding her lifestyle\"\" or anything like that: you're supporting your family, just as she is. If she were earning more than you, would you cut your hours and stay at home? Trick question, as it happens; regardless of your answer to that question, you're still at the same point: both of you are doing the thing you're best suited for (or, the thing you prefer). You're both supporting the family, just in different ways, and suggesting that your contribution is more valuable than hers is a great way to head down the road to divorce: it's also just plain incorrect. My wife and I are in almost the identical situation - 2 kids, she works part time in the biological sciences while spending plenty of time with the kids, I'm a programmer outearning her significantly - and I can tell you that I'd more than happily switch roles if she were the bread earner, and would feel just as satisfied if not more doing so. And, I can imagine myself in that position, so I can also imagine how I'd feel in that position as far as how I value my contribution.\"", "title": "" }, { "docid": "877c80d4c7eec378e1c9a17a7bda4a83", "text": "Assume you will need to retire with a few million in the bank to maintain an average lifestyle. I had an analysis done for me (at 33) that shows my family, to keep it up lifestyle will need to have 3.4MM in the bank so in retirement I can draw down enough cash. This number reflects inflation. Now that you are 18, if you make consistent but small savings you will achieve that financial stability. Try to make it automatic so you aren't tempted to spend. There is more you can do but since you have such an early start, you can do less than most people and still have plenty. Even thought it is great you are thinking about it, don't forget to be young, move around lots and have fun. Just pay yourself first and have fun second. Also, thank whoever guided you to this point. If you did it all on your own, be proud.", "title": "" }, { "docid": "95c4373999574da309599b1f5a8a1c45", "text": "\"No, I do not. The advice is to take advice :-) but it is not required. Several \"\"low cost\"\" SIPPs allow an \"\"Execution Only\"\" transfer from some pensions (generally not occupational or defined benefits schemes [where transfers are generally a bad idea anyway] but FAVCs such as mine are ok). Best Invest is one such, and the fees are indeed relatively low. As far as anyone knows, the government's plans for changes to rules on using pension funds would still apply even once I've transferred my pension pot and begun to withdraw funds (provided I don't commit myself to an annuity or other irrevocable investment). I am not a financial adviser, nor employed or otherwise connected with Best Invest, and I'm not endorsing their SIPP schemes, just giving them as an example of what can be done. [Added after I carried out my plan] I found the process very straightforward; I needed to apply for a pension fund with my new provider and fill in a transfer form, which set up the scheme and transferred the funds with no expense required. Once the money arrived in my pension account I filled in another form to take the lump sum and set up regular withdrawals from the fund. I had my lump sum within a couple of months of initiating the transfer. I'm very happy I did not take independent advice because it would have been very poor value for money. During my researches I was approached eagerly by one firm promising to get me my money quick and claiming to be an independent financial advisor. Luckily I mistrusted the service they offered.\"", "title": "" }, { "docid": "3752027275a54f8d477ceff2be25b5e8", "text": "\"Technically, anyone who advises how you should spend or proportion your money is a financial adviser. A person that does it for money is a Financial Advisor (difference in spelling). Financial Advisors are people that basically build, manage, or advise on your portfolio. They have a little more institutional knowledge on how/where to invest, given your goals, since they do it on a daily basis. They may know a little more than you since, they deal with many different assets: stocks, ETFs, mutual funds, bonds, insurances (home/health/life), REITs, options, futures, LEAPS, etc. There is risk in everything you do, which is why what they propose is generally according to the risk-level you want to assume. Since you're younger, your risk level could be a little higher, as you approach retirement, your risk level will be lower. Risk level should be associated with how likely you're able to reacquire your assets if you lose it all as well as, your likelihood to enjoy the fruits from your investments. Financial Advisors are great, however, be careful about them. Some are payed on commissions, which are given money for investing in packages that they support. Basically, they could get paid $$ for putting you in a losing situation. Also be careful because some announce that they are fee-based - these advisers often receive fees as well as commissions. Basically, associate the term \"\"commission\"\" with \"\"conflict-of-interest\"\", so you want a fee-only Advisor, which isn't persuaded to steer you wrong. Another thing worth noting is that some trading companies (like e*trade) has financial services that may be free, depending how much money you have with them. Generally, $50K is on the lower end to get a Financial Advisors. There has been corruption in the past, where Financial Advisors are only given a limited number of accounts to manage, that means they took the lower-valued ones and basically ran them into the ground, so they could get newer ones from the lot that were hopefully worth more - the larger their portfolio, the more $$ they could make (higher fees or more commissions) and subjectively less work (less accounts to have to deal with), that's subjective, since the spread of the wealth was accross many markets.\"", "title": "" }, { "docid": "75611f7d7709881a3c08bad29d9ebe60", "text": "The amount of money you have should be enough for you to live a safe but somewhat restricted life if you never worked again - but it could set you up for just about any sort of financial goal (short of island buying) if you do just about any amount of work. The basic math for some financial rules of thumb to keep in mind: If your money is invested in very low-risk ways, such as a money market fund, you might earn, say, 3% in interest every year. That's $36k. But, if you withdraw that $36k every year, then every year you have the same principal amount invested. And a dollar tomorrow can't buy as much as a dollar today, because of inflation. If we assume for simplicity that inflation is 1% every year, then you need to contribute an additional $12k to your principal balance every year, just so that it has the same buying power next year. This leaves you with a net $24k of interest income that you can freely spend every year, for the rest of your life, without ever touching your principal balance. If your money is invested more broadly, including equity investments [stocks], you might earn, say, 7% every year. Some years you might lose money on your investments, and would need to draw down your principal balance to pay your bills. Some years you might do quite well - but would need to remain conservative and not withdraw your 'excess' earnings every year, because you will need that 'excess' to make up for the bad years. This would leave you with about $74k of income every year before inflation, and about $62k after inflation. But, you would be taking on more risk by doing this. If you work enough to pay your daily bills, and leave your investments alone to earn 7% on average annually, then in just 10 years your money would have doubled to ~ $2.4 Million dollars. This assumes that you never save another penny, and spend everything you make. It's a level of financial security that means you could retire at a drop of the hat. And if don't start working for 20 years [which you might need to do if you spend in excess of your means and your money dries up], then the same will not be true - starting work at 45 with no savings would put you at a much greater disadvantage for financial security. Every year that you work enough to pay your bills before 'retirement' could increase your nest egg by 7% [though again, there is risk here], but only if you do it now, while you have a nest egg to invest. Now in terms of what you should do with that money, you need to ask yourself: what are your financial goals? You should think about this long and hard (and renew that discussion with yourself periodically, as your goals will change over time). You say university isn't an option - but what other ways might you want to 'invest in yourself'? Would you want to go on 'sabbatical'-type learning trips? Take a trade or learn a skill? Start a business? Do you want to live in the same place for 30 years [and thus maybe you should lock-down your housing costs by buying a house] or do you want to travel around the world, never staying in the same place twice [in which case you will need to figure out how to live cheaply and flexibly, without signing unnecessary leases]. If you want to live in the middle of nowhere eating ramen noodles and watching tv, you could do that without lifting a finger ever again. But every other financial goal you might have should be factored into your budget and work plan. And because you do have such a large degree of financial security, you have a lot of options that could be very appealing - every low paying but desirable/hard-to-get job is open to you. You can pursue your interests, even if they barely pay minimum wage, and doing so may help you ease into your new life easier than simply retiring at such a young age [when most of your peers will be heavy into their careers]. So, that is my strongest piece of advice - work now, while you're young and have motivation, so that you can dial back later. This will be much easier than the other way around. As for where you should invest your money in, look on this site for investing questions, and ultimately with that amount of money - I suggest you hire a paid advisor, who works based on an hourly consultation fee, rather than a % management fee. They can give you much more directed advice than the internet (though you should learn it yourself as well, because that will give you the best piece of mind that you aren't being taken advantage of).", "title": "" }, { "docid": "3787ce52da94e544036b6fada6b1e3a2", "text": "\"I argued for a 15% rule of thumb here: Saving for retirement: How much is enough? Though if you'll let me, I'd refine the argument to: use a rule of thumb to set your minimum savings, then use Monte Carlo to stress-test and look at any special circumstances, and make a case to save more. You're right that the rule of thumb bakes in tons of assumptions (great list btw). A typical 15%-works scenario could include: If any of those big assumptions don't apply to you (or you don't want to rely on them) you'd have to re-evaluate. It sounds like you're assuming 4-5% investment returns? As you say that's probably the big difference, 4-5% is lower than most would assume. 6-7% (real return) is maybe a middle-of-the-road assumption and 8% is maybe an unrealistic one. Many of the assumptions you list (such as married/kids, cost of living, spouse's income, paying for college) can maybe be bundled up into one assumption (percentage of income you will spend). Set a percentage budget and as you go along, stay within your means by sacrificing as required. Also smooth out income across layoffs and things by having an emergency fund. By staying on-budget as you go you can remove some of the unpredictability. The reason I think the rule of thumb is still good, despite the assumptions, is that I don't think a \"\"more accurate\"\" number based on a lot of unpredictable guesses is really better; and it may even be harmful if you use it to justify saving less, or even if you use it to save far too much. See also http://en.wikipedia.org/wiki/Precision_bias Many (most?) important assumptions are not predictable: investment returns, health care inflation, personal health, lifestyle creep (changing spending needs/desires), irrational investment behavior. I agree with you that for many scenarios and people, 15% will not be enough, though it's a whole lot more than most save already. In particular, low investment returns over your time horizon will make 15% insufficient, and some argue that low investment returns over the coming 30 years are likely. Without a doubt, 20% or more is safer than 15%. Do consider that \"\"saving enough\"\" is not a binary thing. If you save only 15% and it turns out that doesn't completely replace your income, it's not like you're out on the street; you might have to retire a few years later, or downsize your house, or something, but perhaps that isn't a catastrophe. There's a very personal question about how much to sacrifice now for less risk of sacrifice in the future. Maybe I'd better qualify \"\"not a binary thing\"\": some savings rates (certainly, anything less than 10%), make major sacrifices pretty likely... so in that sense there is a binary distinction between \"\"plausible plan\"\" and \"\"denial.\"\" Also, precise assumptions and calculations get a lot more useful as you approach retirement age. You can pretty much answer the question \"\"is it reasonable to retire right now?\"\" or \"\"could I retire in 5 years?\"\" (though with a retirement that could last 30 years, plenty of unknowns will remain even then). I think at age 20 or 30 though, just saving 15% (20% if you're conservative), and not spending too much time on a speculative analysis would be a sound decision. That's why I like the rule of thumb. Analysis paralysis (saving nothing or near-nothing) is the real danger early in one's career. Any plausible percentage is fine as long as you save. As your life unfolds and you see what happens, you can refine and correct, adjusting your savings rate, moving your retirement age around, spending a little less or more. The important thing earlier in life is to just get in the right ballpark.\"", "title": "" }, { "docid": "ee9dd9059baeca33306de0ce321cb4f0", "text": "When you say: I am 48 and my husband is 54. We have approx. 60,000.00 left in our retirement accounts. We want to move our money into something so our money will grow. We've been looking at annunities. We've talked to 4 different advisors about what is best for us. Bad mistake, I am so overwhelmed with the differences they all have til I can't even think straight anymore. @Havoc P is correct: ...It's very likely that 60k is not nearly enough, and that making the right investment choices will make only a small difference. You could invest poorly and maybe end up with 50K when you retire, or invest well and maybe end up with 80-90k. But your goal is probably more like a million dollars, or more, and most of that will come from future savings. This is what a planner can help you figure out in detail. TL; DR Here is my advice:", "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": "f95f6b5332818507075b52f5b406e60d", "text": "\"I'd encourage you to use rules of thumb and back-of-the-envelope. Here are some ideas that could be useful: The problem with any kind of detailed calculations is the number of unknowns: There are some really complex calculators out there, for example see ESPlanner (http://www.esplanner.com/) (caution: horrible user interface, but seemed to work), that will include all kinds of factors and run monte carlo and the whole thing. But in my opinion, it's just as good or better to say save at least 15% of income until you have 25x what you spend, or some other such rule of thumb. Here's my little blog post on savings and investing fwiw: http://blog.ometer.com/2010/11/10/take-risks-in-life-for-savings-choose-a-balanced-fund/ Another note, there's sort of an \"\"ideology of how to live\"\" embedded in any retirement recommendation, and you might want to take the time to reflect on that and consciously choose. A book on this topic is Your Money or Your Life by Robin & Dominguez, http://www.amazon.com/Your-Money-Life-Transforming-Relationship/dp/0143115766 which is a sort of radical \"\"you should save everything possible to achieve financial independence as early as possible\"\" argument. I didn't go for their plan, but I think it's thought-provoking. A newer book that may be more appealing is called The Number and it's about your question exactly. It's more designed to get you thinking, while Your Money or Your Life has a particular answer in mind. Both have some math and some rules of thumb, though they aren't focused on that. A kind of general takeaway from these books might be: first think about your expenses. What are you trying to accomplish in life, how would you like to spend your time? And then ask how much money you absolutely need to accomplish that, and focus on accomplishing your goals, spending your time (as much as you can) on what you'd like to spend it on. I'm contrasting this with a generic recommendation to save enough to spend 80% of your income in retirement, which embeds this idea that you should spend as much as possible every year, before and after you retire. Lots of people do like that idea, but it's not a law of the universe or something, it's just one popular approach.\"", "title": "" } ]	fiqa
954e7160cb7b6fdbc7540ae1d0977980	The doctor didn't charge the health insurance in time, am I liable?	[ { "docid": "2dee3bd7391f7fa666fa9ca7b4777d5f", "text": "This has a straightforward answer. It's likely that your doctor and the hospital have no responsibility to ensure that your insurance claim is filed in a timely manner. They bill you whether you or they get reimbursed by insurance, or not. The insurance company is more than happy not to pay you any way they can. Sorry if this is harsh, but it's up to you to follow through. See also here.", "title": "" }, { "docid": "7203484b828e5aa78784765e4e0261a8", "text": "\"I work for a health billing company. It is completely the provider's responsibility to bill your health insurance in a timely manner if they have your health insurance information on file (it sounds like they did). If you can gather a copy of your EOB (Explanation of Benefits) from your health insurance, it will likely say something to the extent of: \"\"claim was submitted after the timely filing limit, therefore no payment was made. The patient is not liable for the remaining balance.\"\" Don't let the hospital/physician bully you into paying for something they should have submitted to the insurance in the first place.\"", "title": "" }, { "docid": "01716d3654fe82072d9cc6b57757c688", "text": "I was in a similar situation years back and I refused to pay the bill. My point of view was that I provided the hospital with all information needed to submit the claim in a timely matter and that I should not be held responsible for their failure to do so. In the end they waived the charges. So while technically I might have been responsible for paying the charges, in reality I think they decided it wasn't worth the hassle of making me (I would have fought it all the way up to the top). Not sure that I would recommend this approach though :)", "title": "" }, { "docid": "b6cd27e3c2f8b12e4334eb3d747c96c3", "text": "The hospital likely has a contract with your insurance company which makes them obligated to bill the insurance before billing you! I had a similar occurrence that was thrown out when my insurance company provided a copy of a contract with the hospital to the judge. So if there is an agreement they must file with the insurance in timely manner.", "title": "" }, { "docid": "4dbb1d642271e9274a2279c952d8d644", "text": "That is your bill because the services were performed for you. You still can negotiate with the doctor however. Suggest that while you aren't willing to pay the full share, you will pay the negotiated amount he would have actually gotten from the insurance company (or some fraction thereof). Doc did make a mistake, but you are very much liable for it.", "title": "" }, { "docid": "64c4ccde4ee50cfa5b1328ff7781c804", "text": "\"I had a similar issue take place at a hospital when the repeatedly billed the \"\"wrong me\"\" -- a stale insurance record left behind from when I was a dependent on my parent's insurance a decade earlier. They ended up billing me for anesthesia when I had a major surgery (everything else was billed to the correct insurance.) The outsourced billing people were pretty unhelpful (not usually the case with hospitals), so I became the squeaky wheel. I sent certified letters, had my priest rattle the cage (it was a Catholic hospital) and eventually talked myself into a meeting with the VP of Finance, who started paying attention when the incompetence of his folks became apparent. Total cost: $0 + my time.\"", "title": "" }, { "docid": "f42e7c2c07d4c18904e3c41d33b8a482", "text": "\"Here's my thought - call the insurance company back. Ask them to just tell you what the \"\"reasonable and customary\"\" approved payment would be. Offer that exact amount to the hospital, it's what they would have gotten anyway, and you learned a cheap lesson.\"", "title": "" }, { "docid": "18d9cbc00c698170d9acdf0c488dd88c", "text": "If you read all that paperwork they made you fill out at the emergency room, there is probably something in there explicitly stating that you owe any bills you rack up regardless of what happens with the insurance company. They generally have a disclaimer that filing for you with your insurance company is a courtesy service they offer, but they are not obliged to do it. Ultimately, you are responsible for your bills even if the provider slow-billed you. Sorry.", "title": "" } ]	[ { "docid": "c6b09a1c18842ba3d64088cabe20f311", "text": "Personal story here: I ended up at the Santa Monica hospital without insurance and left with a bill of $30k-$35k. They really helped me, so I felt like I had a duty to pay them. However, close inspection revealed ridiculous markups on some items which I would have disputed, but I noticed that I had been billed for a few thousands of services not rendered. I got very mad at them for this, they apologized, told me they'd fix it. I never heard back from them and they never put it in collection either. I'm assuming they (rightfully) got scared that I'd go to court and this would be bad publicity. Sometimes I feel guilty I didn't pay them anything, sometimes I feel like they tried to screw me.", "title": "" }, { "docid": "579cd93851b102554f7383a3fb7ae85e", "text": "\"Just as with any other service provider - vote with your wallet. Do not go back to that doctor's office, and make sure they know why. It's unheard of that a service provider will not disclose the anticipated charges ahead of time. A service provider saying \"\"we won't tell you how much we charge\"\" is a huge red flag, and you shouldn't have been dealing with them to begin with. Now you know. how can we ever get health care costs under control if there's so little transparency? I'm assuming you're in the US. This is not going to change, since there's no profit in not screwing the customers. As long as health-care is a for-profit industry, you should expect everyone in it being busy figuring out a way for money to move from your wallet to their. That's what capitalism is about.\"", "title": "" }, { "docid": "2e69800248f5c294156a5264f1126e7a", "text": "I've considered just calling the out-of-network hospital and asking them to reduce the charges. Ideally they would send my health insurance provider a smaller bill which I could just pay. However I want to be careful about how I proceed. Yes, that's what you should be doing. They might give you a discount, but even if not - they will definitely be willing to work out a payment plan for you so that you could pay in installments and not in a lump sum. I have experience with the El Camino group in California, that did just that. It was several hundreds, so they didn't give a discount, but were able to work out an installment plan for several months without much hassle. That is something to do before you get to lawyers. I'm not sure I know how the lawyer could be useful to you, other than claiming bankruptcy or waiting for them to turn to collections and then fight those. You should also work with your insurance. How much is your deductible? If your deductible is so high that it exceeds the several thousands bill you got - do you have a HSA? FSA? These will allow you paying the bill with pre-tax money, saving quite a lot (depending on your brackets and how much you put there). I would expect the insurance to bill you for the deductible, and cover all the rest. Is it not what is happening?", "title": "" }, { "docid": "78a3ef2b2e99a5dba21d383e0e5c778c", "text": "Due to the fact that months have gone by since the item was shipped to you it will be hard to resolve by sending it back. The collection agency is now only interested in getting as much of the money as they can from you. They may have sent a percentage of the debt to the original company when they bought the debt. They may also be working on a commission. Therefore they are not interested in having everybody happy with the result. They need to follow the law, but they don't care if you are a happy customer. The longer you wait to resolve it, the longer it will remain on the credit report. The fact that it went to collections has already hurt your score. Yes, make sure that they update your credit file to reflect that you have paid the debt. Get it in writing. Also check with your health insurance company to see if this is at least partially covered by insurance. They generally won't cover the $12 in fees from the collections company, but they might cover part of the original bill. Depending on the item, it might also be an allowable expense for your FSA (Flexible spending account) or your HSA (Health Spending account).", "title": "" }, { "docid": "985c27490a1fc20d8f94bcadedf22034", "text": "Unfortunately I've seen every single example you've provided from the health care providers perspective. Trust me, they aren't happy about the situation either - hence the reason they will demand up front payment from you based on who your insurance carrier is. I could name a few of the top brand name insurance companies in this country that do all of this to their clients. Medical billing is an incredibly over complicated beast. One that insurance companies have been doing everything they can to make worse over the years. The codes can change annually and there are MANY different codes which can cover the exact same situation. Sure the insurance company might cover gallstones, but if you happen to be pregnant, well, that may not covered even though the treatment is the exact same. What can you do? Consider locating a new insurance company. You do have options and don't have to go with the one your company uses. The downside is that this is going to take quite a bit of research on your part and it will end up costing you more money on your monthly premiums simply because your company won't be footing part of the bill. Talk to other co-workers and see if their experiences match yours. If so, try to get a large enough group together to approach management and demand resolution. A third potential avenue is to get politically involved - but I'm enough of a pessimist that I doubt that would do any good. From what I've seen, neither major political party's current position actually does anything to solve the problem. A fourth option is suing the insurance company - but that is going to be incredibly expensive and take forever. You might have better luck getting together with a bunch of local people and demand your attorney general review the billing/payment practices. Again, this is going to require a LOT of effort. A fifth option is to attempt to cash pay your bills and submit them yourself to the insurance company for reimbursement. If you do this you can likely negotiate lower bills with the medical provider. For anything less than about $2,000 I negotiate the amount prior to service. Believe me when I say that providers are more than happy to give decent discounts if they know they won't have to deal with the insurance companies themselves. Slightly more work for you, but could be far cheaper in the long run.", "title": "" }, { "docid": "778cfe641844ff39ca898a30407737b5", "text": "First of all, the company will pay the money for the insurance, do not be afraid. They have to pay IF 1) the insurance premium was paid every month and 2) there was not a false declaration of health when the contract was signed 5 or 10 years ago. It normally takes between 1 month and 4 months to settle an insurance contract. Your case might take a little longer. Second, the insurance company admit that you are the beneficiary, so the money will eventually come to you. What they say is that you need someone in charge, a trustee or a curatorship to handle the money in your name. Why? Because you have a mental health team in charge of you. Be patient, and... Third, start by talking to someone in charge in your mental health team or the people you see. What you need is someone acting as a trustee for you. You need to go and seek free legal aid. Depending on your country or state of residence. I cannot help you more than that. You will have the money, eventually in a few months, but you need to find a trustee, a guardian as soon as possible. Someone in your family could easily do it for you ?", "title": "" }, { "docid": "7dc49b86aa304001fc0f24f29ec4a013", "text": "\"Is it common in the US not to pay medical bills? Or do I misunderstood what had been said? I would feel comfortable saying that most people who face medical bills don't pay them. They are unable. If they were able, they would have gotten medical insurance. In America, something like 55% of individuals do not have even $500 of savings, so when a big medical bill rolls in especially on top of lost work hours, they don't have a lot of options. Hospitals charge reasonable prices to insurance companies and Medicare. These fees are negotiated in advance and reflect the hospital's actual costs. This is called \"\"usual, reasonable and customary\"\". Hospitals charge a wildly inflated, criminally outrageous \"\"cash price\"\" to the uninsured. For instance back when Medicare paid about $175 for an ambulance ride, a friend was billed $1100 for the exact same thing. The hospital aims to scare the living daylights out of the patient (caring nothing about what that does to their health!) Perfect world, the patient pays them the $1100 instead of paying their rent. If the patient puts up a fight, they hope to haggle them down to something like $400, remember it really costs $175. This tactic is a huge profit-center for hospitals, even the \"\"charity\"\" hospitals, and they feel justified because so many uninsured don't pay at all (the hospital considers them \"\"deadbeats\"\".) Well, patients don't pay because cash prices are unreachable, so they just give up. Anyway, your friends are correct, don't even think of paying those cash billing amounts. Research and find out what Medicare pays, offer 60% of that, and haggle it to 100%. And sleep well knowing you paid what is fair. Not all services are as overpriced as my example, but most are at least 50% too high. The hospital does send you all the bills as a formality, even while they submit them to your insurance company. And then the insurance company usually pays them, so it is correct to \"\"not pay that bill\"\". A lot of medical offices will check with your insurance company even before you leave the office, and ask you to immediately pay anything the insurance won't cover. For instance they often have \"\"co-pays\"\" where you pay $20 and they pay the rest. To be clear: if your insurance company negotiates a rate with the hospital, say $185 for the ambulance ride, that is your price, which you are entitled to as a member of that insurance system. A lot of people get their livelihood from the inefficiency in medical insurance and billing. Their political power is why it's so hard for America to install a simpler system (or even replace Obamacare in an ideal political environment). It is also a big part of why America spends 18% of GDP on healthcare instead of 7-11% like our European peers who do not have to account for every gauze or rebill multiple insurers. Sorting out \"\"who pays\"\" would be expensive even if everyone did pay.\"", "title": "" }, { "docid": "8c9e00ce04a383d57acbd2b60aa935eb", "text": "Do you have a clue of what would of happened to you if you had some serious condition and at some point you lost your job? Insurers would deny you insurance because of pre-existing conditions, and you would be left out to dry. Now maybe you aren't as unfortunate as having a serious health condition, but no new bill will make everything better for everyone.", "title": "" }, { "docid": "624be7119d309f77ccbe708210bd6d79", "text": "Here's your problem: The debt is valid and it is your debt, regardless of your arrangement with the insurance company. The insurance company (possibly) owes you money, and you owe the Doctor money. You are stuck in the middle, and in the end it doesn't matter whether the insurance company pays as to whether you owe the money. Don't ignore them. Also, disputing the debt it pointless because the truth is that you do owe the debt. The insurance company may owe you money (which is in dispute), but the debt to your medical provider is your own. You are just stuck in the middle. It sucks, but is pretty common. I think the best you can do is keep working on the insurance company and responding to the bill collectors letting them know that you are working on it and will need to pay late. In theory they deal with this a lot and probably understand, not that it will make them lay off you in the meantime. In the end it is possible you might have to sue the insurance company to get the money. One thing to be careful about: If the debt is fairly old (several years) you may want to avoid making partial payments because if this goes on your credit report, that payment may extend the period where the negative information can appear on your credit history.", "title": "" }, { "docid": "8c8ca4077f27a86a88ff81a4d00b991b", "text": "I bought Health Insurance for myself after a period without it, and my premiums were not terrible. I was a 27 year old man, living in California, no preexisting conditions, and I paid approximately 90$ a month. This was for a standard Health Insurance plan. However, when I moved back to NY a little while later, insurance companies wanted almost $500/month for catastrophic coverage. So, from personal experience, my answer is that price varies widely by state. Different states have different regulations as to what Health Insurance Companies need to cover and at what price. In NY, Health Insurance companies can't charge different rates according to age. Also, in NY, there is a price spiral, where the price is so high, few people buy it, so they have to raise the price because not enough well people are in the pool, so fewer people buy it.... To test it out, go to an online insurance broker, like ehealthinsurace, and put in your proposed information, including that you haven't been covered for a period. This way you will know.", "title": "" }, { "docid": "3b4b8a11090f24d11251af51477b9283", "text": "\"At fault doesn't mean negligent... If a driver were doing 150 on the wrong side of the street and gets in an accident, no insurer is paying that out. Likewise a credit agency not properly handling sensitive info and not giving proper disclosures of a breach won't lead to an insurance policy giving them a dime. I'd say google \"\"does insurance cover negligence,\"\" but you should probably Google the definition of negligence first. What your saying and the links you've provided clearly shows you don't even know what that word means.\"", "title": "" }, { "docid": "081a34f8750c0ea02b30f506ccf7d182", "text": "Insurance is not health care. Insurance is a financial instrument designed to protect the insured from short term shocks caused by some calamity by spreading out the cost over time. Not covering someone with a pre-existing condition is similar to an car-insurance company refusing to pay for repairing a damaged car, where the damage was caused prior to obtaining insurance. Not to be rude but failure to understand that utterly simple basic financial concept is exactly the sort of willful ignorance I'm talking about. What you are interested in is 'justice'. Someone was harmed by a desease which is tragic for the individual, and in some sense 'cosmically unfair'. It isn't however the fault of the insurance company that the person didn't purchase a policy beforehand. It would in fact be unfair to existing policy holders if the insurance company pays such claims, as it would raise their rates to cover those who will now rationally choose not to get insurance until after they have a claim.", "title": "" }, { "docid": "8102f2a9404e25c25d0e56eac2f2aa45", "text": "No. You have been purchasing protection from unexpected emergencies. You got the protection you paid for. That money has been spent. Some insurance plans do pay you something at the end. They do this by charging you additional money, and investing it. At the end, you get some of the profit n that investment, after the company has taken payments for managing this account. You can do better by setting up your own investments, separate from the insurance.", "title": "" }, { "docid": "6dcb4047eadf3949ca565819c9a29fc0", "text": "I'm going to echo Phil and say that you should add more information. That being said, I think it is possible for you to owe the government that much. If you received a federal health insurance subsidy and live in a state that didn't expand medicaid, you could have received a subsidy through out the year that you did not end up qualifying for. It appears you are outside the medicaid limit of 133% of the poverty level($11,670) or $15,521. If you received a subsidy of $275 a month from the marketplace, you would have received $3300 worth of aid from the government that you don't qualify for. Now they are expecting you to pay it back.", "title": "" }, { "docid": "764dee227ea830455f3ebacea7bd0685", "text": "Patience is the key to success. If you hold strong without falling to temptations like seeing a small surge in the price. If it goes down it comes up after a period of time. Just invest on the share when it reaches low bottom and you could see you money multiplying year after year", "title": "" } ]	fiqa
37124d0a9bef43182498f8aaae5c4ca4	How do I calculate the dwelling coverage I need from the information I have?	[ { "docid": "1b270b0d606e700dc19a4969d1c78f97", "text": "This is where an insurance agent is very useful. They will help you choose appropriate coverage, based on local rebuilding costs, the build quality of your house (higher quality or historic/semi-historic construction requires a different type of coverage), etc. They can also help advise you on things like the need for flood insurance, etc. Local rules can vary, and the local agent will know about them. For example, we found out that my home was in a semi-historic district, which requires using higher-cost materials for reconstruction. Also, our city separately licenses tradespeople, who tend to be unionized and thus more expensive. Had I just picked default coverages, I would have been in a pickle in the event of a loss.", "title": "" }, { "docid": "a202022404641f8864985959431ebc22", "text": "Never take the first quote. Consider what it would really cost to replace the house -- to rebuild and pay for living while you do so (including demolition, etc.) and/or pay off the mortgage and return your equity if it is a financed property. Most insurances will have a limit on how much coverage you can get based on the property value and your goods value estimates. Shop around for a company that will give you a good price but also good customer service and a smooth claims process. They should be solvent (able to pay your claim if, say, a tornado hit the whole neighborhood). And they should cover your reasonable replacement costs. And remember, insurance is about the big losses like fires. Know what you are comfortable self insuring (higher or lower deductibles, optional coverages, etc.) and you will have an easier time getting the coverage you need for the price you want to pay.", "title": "" }, { "docid": "4f9cb22a348d006122b9c1cb093de2e7", "text": "You can't compare the different quotes unless they have the same numbers to work with. The big companies should use similar models to come up with values for the contents. In many cases they will assume some standard values for things like appliances. Yes you have a stove, but unless it is commercial grade they won't care when giving you a quote. If you have very expensive items you may need a rider to cover them. There is not relationship between the county assessment and the cost to rebuild. The insurance doesn't cover the land. You have to make sure that all quotes include the same riders: cost to put you in a motel, flood insurance... and the same deductibles. Your state may have an insurance office that can help answer your question. Here is the one for Virginia.", "title": "" } ]	[ { "docid": "15d1ca497dfc22d7af0ebe893732281e", "text": "\"There is a term for this. If you google \"\"House Hacking\"\" you will get lots of articles and advice. Some of it will pertain to multifamily properties but a good amount should be owner occupied and renting bedrooms. I would play with a mortgage calculator like Whats My Payment. Include Principle, interest, taxes and insurance see how much it will cost. At 110k your monthly fixed payments will depend on a number of factors (down payment, interest, real estate tax rate and insurance cost) but $700-$1000 would be a decent guess in my area. Going off that with two roommates willing to pay $500 a month you would have no living expenses except any maintenance or utilities. With your income I would expect you could make the payment alone if needed (and it may be needed) so it seems fairly low risk from my perspective. You need somewhere to live you are used to roommates and you can pay the entire cost yourself in a worst case. Some more things to consider.. Insurance will be more expensive, you want to ensure you as the landlord you are covered if anything happens. If a tenant burns down your house or trips and falls and decides to sue you insurance will protect you. Capital Expenses (CapEx) replacing things as they wear out. On a home the roof, siding, flooring and all mechanicals(furnace, water heater, etc.) have a lifespan and will need to be replaced. On rental properties a portion of rent should be set aside to replace these things in the future. If a roof lasts 20yrs,costs $8,000 and your roof is 10years old you should be setting aside $70 a month so in the future when this know expense comes up it is not a hardship. Taxes Yes there is a special way to report income from an arrangement like this. You will fill out a Schedule E form in addition to your regular tax documents. You will also be able to write off a percent of housing expenses and depreciation on the home. I have been told it is not a simple tax situation and to consult a CPA that specializes in real estate.\"", "title": "" }, { "docid": "6950d92f340ffdb328d15afac8299aba", "text": "BLUF: Continue renting, and work toward financial independence, you can always buy later if your situation changes. Owning the house you live in can be a poor investment. It is totally dependent on the housing market where you live. Do the math. The rumors may have depressed the market to the point where the houses are cheaper to buy. When you do the estimate, don't forget any homeowners association fees and periodic replacement of the roof, HVAC system and fencing, and money for repairs of plumbing and electrical systems. Calculate all the replacements as cost over the average lifespan of each system. And the repairs as an average yearly cost. Additionally, consider that remodeling will be needful every 20 years or so. There are also intangibles between owning and renting that can tip the scales no matter what the numbers alone say. Ownership comes with significant opportunity and maintenance costs and is by definition not liquid, but provides stability. As long as you make your payments, and the government doesn't use imminent domain, you cannot be forced to move. Renting gives you freedom from paying for maintenance and repairs on the house and the freedom to move with only a lease to break.", "title": "" }, { "docid": "b19e8b2b32147e2fd88aaead43284ebe", "text": "For each liability, you should insure to the risk. A $150k home should be insured for that amount plus contents. Same for your car, if you want to insure for damages, fine, but liability is mandatory. It's not about what you want to spend but how to not take on more risk than nescesary and not over insure which is just wasteful.", "title": "" }, { "docid": "288eadaa01cd9248517c0b96a13118d2", "text": "I have purchased three properties. I will say the #1 rule is 20% things go wrong all the time. Seriously, renters are pretty terrible. If you aren't making 20% profit on the books. So add up mortgage, insurance, all costs. Then multiply that by 1.25. Whatever number that is is what you must get for rent just to break even. I can't stress this enough. If rental rates don't support you getting that kinda price then don't get into it. This is the break even number.", "title": "" }, { "docid": "3e9ced915f7fb7931adc0b6e4a27c9f3", "text": "If you're looking for some formula, I don't think one exists. People talk about this all the time and give conflicting advice. If there was a proven-accurate formula, they wouldn't be debating it. There are basically 3 reasons to do a home improvement project: (a) Correct a problem so that you prevent on-going damage to your home. For example, have a leaking roof patched or replaced, or exterminate termites. Such a job is worthwhile if the cost of fixing the problem is less than the cost of future damage. In the case of my termite and leaking roof examples, this is almost always worth doing. Lesser maintenance problems might be more debatable. Similarly, some improvements may reduce expenses. Like replacing an old furnace with a newer model may cut your heating bills. Here the question is: how long does it take to repay the investment, compared to other things you might invest your money in. Just to make up numbers: Suppose you find that a new furnace will save you $500 per year. If the new furnace costs $2000, then it will take 4 years to pay for itself. I'd consider that a good investment. If that same $2000 furnace will only cut your heating bills by $100 per year, then it will take 20 years to pay for itself. You'd probably be better off putting the $2000 into the stock market and using the gains to help pay your heating bill. (b) Increase the resale value of your home. If you are paying someone else to do the work, the harsh reality here is: Almost no job will increase the resale value by more than the cost of getting the job done. I've seen many articles over the years citing studies on this. I think most conclude that kitchen remodeling comes closet to paying for itself, and bathrooms come next. New windows are also up there. I don't have studies to prove this, but my guesses would be: Replacing something that is basically nice with a different style will rarely pay for itself. Like, replacing oak cabinets with cherry cabinets. Replacing something that is in terrible shape with something decent is more likely to pay back than replacing something decent with something beautiful. Like if you have an old iron bathtub that's rusting and falling apart, replacing it may pay off. If you have a 5-year-old bathtub that's in good shape but is not premium, top of the line, replacing it with a premium bathtub will probably do very little for resale value. If you can do a lot of the work yourself, the story changes. Many home improvement jobs don't require a lot of materials, but do require a lot of work. If you do the labor, you can often get the job done very cheaply, and it's likely that the increase in resale value will be more than what you spend. For example, most of my house has hardwood floors. Lots of people like pretty hardwood floors. I just restained the floors in two rooms. It cost me, I don't know, maybe $20 or $30 for stain and some brushes. I'm sure if I tried to sell the house tomorrow I'd get my twenty bucks back in higher sale value. Realtors often advise sellers to paint. Again, if you do it yourself, the cost of paint may be a hundred dollars, and it can increase the sale price of the house by thousands. Of course if you do the work yourself, you have to consider the value of your time. (c) To make your home more pleasant to live in. This is totally subjective. You have to make the decision on the same basis that you decide whether anything that is not essential to survival is worth buying. To some people, a bottle of fancy imported wine is worth thousands, even millions, of dollars. Others can't tell the difference between a $10,000 wine and a $15 wine. The thing to ask yourself is, How important is this home improvement to me, compared to other things I could do with the money? Like, suppose you're considering spending $20,000 remodeling your kitchen. What else could you do with $20,000? You could buy a car, go on an elaborate vacation, eat out several times a week for years, retire a little earlier, etc. No one can tell you how much something is worth to you. Any given home improvement may involve a combination of these factors. Like say you're considering that $20,000 kitchen remodeling. Say you somehow find out that this will increase the resale value by $15,000. If the only reason you were considering it was to increase resale value, then it's not worth it -- you'd lose $5,000. But if you also want the nicer kitchen, then it is fair to say, Okay, it will cost me $20,000, but ultimately I'll get $15,000 of that back. So in the long run it will only cost me $5,000. Is having a nicer kitchen worth $5,000 to me? Note, by the way, that resale value only matters if and when you sell the house. If you expect to stay in this house for 20 years, any improvements done are VERY long-term investments. If you live in it until you die, the resale value may matter to your heirs.", "title": "" }, { "docid": "1018d9e6c1f99370dcffd85bd768bfaf", "text": "To your secondary question: Appropriately consider all estimated numbers involved with keeping the house compared to your closest estimate of what the home could sell for. Weigh out the pros and cons yourself as a stranger will not be able to 100% appreciate what you value and dislike. Remember to include insurances, taxes, HOA(s), and the actual mortgage payment. Depending on how you also plan to rent out the property, include whichever utilities you intend to cover (if any). There will also be costs for property management and upkeep as things will break overtime and tenants will not hesitate to get you (or your management) to fix them, either way that means you are paying. I would also keep in mind while homes typically appreciate in value there is a higher risk with tenants for the value to depreciate to damages and poor upkeep. There are increased legal risks to renting, so be sure you have properly vetted whichever management you are going with. In extreme circumstances you also could be required to retain an attorney to defend yourself again litigation because whichever management team you hire will most likely defend themselves and not include you in that umbrella. My family lives in the LA area as well and a judge refused to throw out an obvious frivolous suit when my parents attempted to rent out a house. The possible renters after signing the main paperwork never showed to finish a second set of documents for renting. Parents immediately declined to rent to these people as they missed something so important without any explanation and they sued claiming racism, emotional damages, and some other really crazy things despite my parents never having met them (first meeting was between property management and renters only). Personally and professionally, I would only suggest renting our the place and not selling if you can turn a profit after all the above mentioned costs. If renters are only paying to keep the property in the black you have yourself a non-earning asset which WILL be damaged over time and require repairs which will come out of your pocket. Also, while the property is unoccupied you also must remember it is not earning at that time. Much of this may sound obvious, overcautious, etc... I simply wish to provide my family's experience to help you in making your decisions. Best of luck with your endeavor. Edit: Also, you will be required to report all earned rental income on your taxes. They will fall under the Schedule E and possibly K-1 area. I would strongly recommend consulting with an actual accountant about the impacts to you.", "title": "" }, { "docid": "b3e94cc42dcf1f9e62f72f804069018e", "text": "Seems like a bad deal to me. But before I get to that, a couple of points on your expenses: Onward. You value a property by calculating its CAP rate. This is what you're calculating, except it does NOT include interest like you did -- that's a loan to you, and has no bearing on whether the unit itself is a good investment. It also includes estimations of variable expenses like maintenance and lack of income from vacancies. People argue vociferously on exactly how much to calculate for those. Maintenance will vary by age of the building and how damaging your tenets are. Vacancies vary based on how desirable the location is, how well you've done the maintenance, and how low the rent is. Doing the math based on your numbers, with just the fixed expenses: 8400 rent - 2400 management fee - 100 insurance = 5900/year income. 5900/150000 = 0.0393 = 3.9% CAP rate. And that's not even counting the variable expenses yet! So, what's a good CAP rate? Generally, 10% CAP rate is a good deal, and higher is a great deal. Below that you have to start to get cautious. Some places are worth a lower rate, for instance when the property is new and in a good location. You can do 8% on these. Below 6% CAP rate is usually a really bad investment. So, unless you're confident you can at least double the rent right off the bat, this is a terrible deal. Another way to think about it You're looking to buy with your finances in just about the best position possible -- a huge down payment and really low interest. Plus you haven't accounted for maintenance, taxes (if any), and vacancies. And still you'd make only a measly 1.2% profit? Would you buy a bond that only pays out 1.2%? No? What about a bond that only pays 1.2%, but also from time to time can force YOU to pay into IT a much larger amount every month?", "title": "" }, { "docid": "ad8e946365b5d91b69c106948370a81c", "text": "There's a company called IdealSpot (I haven't used them, just heard of them) that will do that kind of analysis for you and suggest locations. Also, Census data is free and a good resource for demographic data when it comes to neighborhoods. Also, if you have a local SBDC they may have those numbers handy and they also can really walk you through the loan part of the process as well.", "title": "" }, { "docid": "41e358f0c4f17a2e8510b504eef1f6d2", "text": "Retirement calculation, in general, should be based on the amount of money needed per year/month and the expected life expectancy. Life expectancy, if calculated to 90 years (let's say) indicates that post retirement age (60 yrs.) your accumulated/invested money should generate adequate income to cover your expenses till 90 years. The problem in general is not how long you shall live but what would be your expected spending from retirement to end of life expectancy. The idea is at the minimum your investments should generate income that is inflation adjusted. One way to do this is to consider your monthly expense now i.e. the expense that is absolute minimum for carrying on (food, electricity, water, medicines, household consumables, car petrol, insurance, servicing, entertainment, newspaper etc.) this does not contain the amortizable liabilities (home loan, child's education, other debts). It is better to take this amount per family rather than per person and yearly rather than monthly (as we tend to miss a lot of yearly expenses). This amount that you need today will increase at a Compounded Annual Growth Rate (CAGR) of the average inflation. For example, if today you spend 100 per year in 7 years you will need to spend appx. 200 at 10% inflation. Now, your investments will not increase post your retirement, so your current investment needs to do two things (1) give you your yearly requirement (2) grow by a fixed amount so that next year it can give you CAGR adjusted returns. In general, this kind of investment grows by high net amounts initially and slowly the growth decrease. The above can be calculated by Net Present value (NPV) formulae (http://en.wikipedia.org/wiki/Net_present_value). The key is to remember that the money that is invested when you retire should be able to give you inflation adjusted returns to cover your yearly expenses. How much money you need depends on your life style/expectation and how much return is received depends on the instruments that you invest on. As for your question above on the difference between the age of you and your spouse, it better to go with the consolidated family requirement and get an idea of how much investment is necessary and provision the same as soon as possible from your as well as your spouse's income. Hope this helps.- thanks", "title": "" }, { "docid": "bc1dcede73c8ceea3e5cbabdc536be5b", "text": "I would not do this personally for most house items, since I really view them as consumables. I am using household items until they wear out, not placing my money in an investment that needs to retain or return value. If you have any investment-like items, or if the value represents a significant (you decide this) portion of your annual income or net worth, then track it with inventory and schedule it on an insurance policy. If your home is destroyed and you have an inaccurate inventory or no inventory at all, what does insurance provide for replacement of property? Maybe more importantly, will insurance even care about your own personal inventory? (Isn't it easy to scam, through value inflation?) For insurance, you need to start with the details of your homeowners policy. Often there will be a general blanket amount of what they will reimburse. If you have items over that amount, or need more coverage, you will need to schedule the items up-front with insurance. This way, the value of expensive items are known and agreed on by all parties before an event. It ensures a quick claim resolution, and it is the cleanest and easiest way to deal with the insurance company. You need to talk to your agent about the unique aspects of your policy. You need to make sure the policy will cover your liabilities.", "title": "" }, { "docid": "b7db85a99ebe1994875cee8e6b6cc37f", "text": "The metric I prefer is net worth, minus the value of your home, then divide by your annual expenses. The house is subtracted because you need to live somewhere, so its worth isn't part of retirement savings. I divide by expenses to create result that really answers how close one is to being able to retire. The target is to have 25X your required spending gap. Note, as you close in on retirement, and social security is still in place, you can use it in your planning. If I were in my 20s or 30s today, I wouldn't use it in my numbers.", "title": "" }, { "docid": "8ad92aef2db18e00c11a34e335a8493c", "text": "Well for starters you want to rent it for more than the apartment costs you. Aside from mortgage you have insurance, and maintenance costs. If you are going to have a long term rental property you need to make a profit, or at a bare minimum break even. Personally I would not like the break even option because there are unexpected costs that turn break even into a severe loss. Basically the way I would calculate the minimum rent for an apartment I owned would be: (Payment + (taxes/12) + (other costs you provide) + (Expected annual maintenance costs)) * 100% + % of profit I want to make. This is a business arrangement. Unless you are recouping some of your losses in another manner then it is bad business to maintain a business relationship that is costing you money. The only thing that may be worth considering is what comparable rentals go for in your area. You may be forced to take a loss if the rental market in your area is depressed. But I suspect that right now your condo is renting at a steal of a rate. I would also suspect that the number you get from the above formula falls pretty close to what the going rate in your area is.", "title": "" }, { "docid": "1f79e57b1d86b5de06f91f3c14f674b8", "text": "As for a formula, there isn't a simple one that you can apply to every type insurance. I'll try my best for a simple answer. Is the event devastating enough to change your lifestyle (looking at life necessities, not wants and nice to haves)? Is the event very likely to happen? Do you have enough emergency funds to cover such an event? Once that emergency fund is utilized, how long does it take you to restore that fund to be ready for the next event? If the event is devastating enough and is very likely to happen and you do not have the cash to cover the event, and/or it would take too long to restore that emergency fund, then it makes sense to consider insurance. Then you would have to examine if the benefit(s) outweight cost of the premium paid for the insurance. If it is pennies of premium for a dollar of benefit, then it makes sense.", "title": "" }, { "docid": "37528e2711eafb0e0573772a2bf49083", "text": "The equation is the same one used for mortgage amortization. You first want to calculate the PV (present value) for a stream of $50K payments over 20 years at a10% rate. Then that value is the FV (future value) that you want to save for, and you are looking to solve the payment stream needed to create that future value. Good luck achieving the 10% return, and in knowing your mortality down to the exact year. Unless this is a homework assignment, which need not reflect real life. Edit - as indicated above, the first step is to get that value in 20 years: The image is the user-friendly entry screen for the PV calculation. It walks you though the need to enter rate as per period, therefore I enter .1/12 as the rate. The payment you desire is $50K/yr, and since it's a payment, it's a negative number. The equation in excel that results is: =PV(0.1/12,240,-50000/12,0) and the sum calculated is $431,769 Next you wish to know the payments to make to arrive at this number: In this case, you start at zero PV with a known FV calculated above, and known rate. This solves for the payment needed to get this number, $568.59 The excel equation is: =PMT(0.1/12,240,0,431769) Most people have access to excel or a public domain spreadsheet application (e.g. Openoffice). If you are often needing to perform such calculations, a business finance calculator is recommended. TI used to make a model BA-35 finance calculator, no longer in production, still on eBay, used. One more update- these equations whether in excel or a calculator are geared toward per period interest, i.e. when you state 10%, they assume a monthly 10/12%. With that said, you required a 20 year deposit period and 20 year withdrawal period. We know you wish to take out $4166.67 per month. The equation to calculate deposit required becomes - 4166.67/(1.00833333)^240= 568.59 HA! Exact same answer, far less work. To be clear, this works only because you required 240 deposits to produce 240 withdrawals in the future.", "title": "" }, { "docid": "5231937629f4b8e90d974bc1ce6b52da", "text": "In Canada I think you'd do it as a % of square footage. For example: Then you can count 20% of the cost of the of renting the apartment as a business expense. I expect that conventions (i.e. that what's accepted rather than challenged by the tax authorities) may vary from country to country.", "title": "" } ]	fiqa

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