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[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how do online referal systems work?", "role": "user" }, { "content": "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.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "i'm in australia. what should i look for in an online stock broker, for trading mostly on the asx?", "role": "user" }, { "content": "optionsxpress is good. i have used them for many years to trade stocks mainly (writing covered calls and trading volatility). you set the account up through optionsxpress australia, and then fund the account from one of your accounts in australia (i just use my bank of queensland account). the currency conversion will be something to watch (aud to usd). the rates are low, but one of the best features is \"virtual trading\". it allows you to give yourself virtual funds to practice. you can then experiment with stop-losses and all other features. perhaps other platforms have this, but i am yet to see it... anyway, if you want to trade in us stocks you are going to need to switch to usd anyway. asx never moves enough for my interests. regards, sb", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "does a disciplined stock investor stick with their original sell strategy, or stay in and make more?", "role": "user" }, { "content": "ask yourself a better question: under my current investment criteria would i buy the stock at this price? if the answer to that question is yes you need to work out at what price you would now sell out of the position. think of these as totally separate decisions from your original decisions to buy and at what price to sell. if you would buy the stock now if you didn't already hold a position then you should keep that position as if you had sold out at the price that you had originally seen as your take profit level and bought a new position at the current price without incurring the costs. if you would not buy now by those criteria then you should sell out as planned. this is essentially netting off two investing decisions. something to think about is that the world has changed and if you knew what you know now then you would probably have set your price limit higher. to be disciplined as an investor also means reviewing current positions frequently and without any sympathy for past decisions.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "will a credit card company close my account if i stop using it?", "role": "user" }, { "content": "there is no universal answer here. some card issuers will. some that will close the account will warn you first. for my \"sock drawer\" cards i'll try to take each out semi-annually to make a single transaction, then put it back in the drawer. i've heard you should charge something quarterly, i've never had one closed with semi-annual charges.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "received an unexpected cashiers check for over $2k from another state - is this some scam?", "role": "user" }, { "content": "this is a variation of a very common scam. the principle of the scam is this: i give you a check for a huge amount of money which you pay in your account. then i ask you to pay some money from your account into a third account. two months later the bank detects that my check was forged / stolen / cancelled / whatever and takes the huge amount of money away from your account. but you paid the money from your account, and that money is gone from your account and irrevocably ended up in my account.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "do any publically available documents from ir or sec include all patents the company holds?", "role": "user" }, { "content": "it appears as others have said that companies are not required to state this on as any sort of asset. i remembered a friend of mine is a lawyer specializing in intellectual property rights so asked him and confirmed that there's no document companies are required to file which states all patent holdings as assets. there are two ways he suggested for finding out. once you find a company you're interested in can search patents by company using one of the two following: us patent office website's advanced search: http://patft.uspto.gov/netahtml/pto/search-adv.htm aanm/company for example entering into the textarea, \"aanm/google\" without the quotation marks will find patents by google. the other is a google patent search: http://www.google.com/patents/", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what are trailing 12-month total returns?", "role": "user" }, { "content": "total return is the percent change in value (including andy dividends) of an instrument. the \"trailing 12-month\" means that your starting point is the value 12 months ago. so the formula is: where v is the value of the instrument on the reference date, v0 is the value of the instrument 12 months prior to the reference date, and d is the amount of dividends paid between the two dates.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how are the $1 salaries that ceos sometimes take considered legal?", "role": "user" }, { "content": "taxable fringe benefits are included in taxable wages for the purpose of flsa. so when those executives get to use company cars or company jets that value is \"wage\" even if it isn't salary.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "still have mortgage on old house to be torn down- want to build new house", "role": "user" }, { "content": "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.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "are the debt reduction company useful?", "role": "user" }, { "content": "no. not in the uk anyway, they are just an extra person/company that you have to pay.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "highest market cap for a company from historical data", "role": "user" }, { "content": "in common with many companies, microsoft has been engaging in share buyback programmes, where it buys its own shares in the market and then cancels them. it's often a more tax-efficient way to distribute profits to the shareholders than paying a dividend. so there were more microsoft shares in circulation in 1999 than there are now. see here for information.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "i carelessly invested in a stock on a spike near the peak price. how can i salvage my investment?", "role": "user" }, { "content": "i am very surprised no one mentioned the stock repair option strategy which has real benefits and is one of the mainstream option strategies. quote: who should consider using the stock repair strategy? in a nutshell, you are buying call options with current strike price (at-the-money) and sell call options with higher strike price (out-of-the-money), all with the same expiry dates. the only reason to also sell call options here is to recover your premium paid for the other call options. if you are comfortable paying that premium, you just buy the call options without selling the others. in case your stock will rise moderately to a price between the two strike prices, your call option will rise together with your stock, so you will be faster to recover your money. this is the main reason it is called repair. if you have sold any call options, as the price rises, you have to be careful when it reaches the strike price of the options sold, as from there on you will begin incurring losses. it is however exactly the lucky outcome you were hoping for, your stock is higher, and you can buy back those loss making options - then or shortly before. if you didn't sell any options and payed your premium, you don't need to worry at all at this stage. warning it should be noted that the stock repair strategy offers no protection for your stock price further falling down. in that case all those options will expire worthless or you can sell back the ones your bought but likely not for much. in order to have the downside protection for your stock, there are other strategies, the simplest one being buying a put option at-the-money or slightly lower. that will effectively cut your possible losses to the option premium (which is the main use of that option). again, if you hate to pay that premium, you can offset it by selling other options that you either hope won't be exercised or take steps to protect you against those.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is keeping old credit cards and opening new credit cards with high limits and never using an ideal way to boost credit scores?", "role": "user" }, { "content": "problems with your plan (in no particular order) there is a limit, once they have decided that you have enough credit they won't offer any more. if the economy changes (like it did in 2008) they can reduce the limit on existing accounts. if you don't use them, they may decide to close them. using existing cards will encourage the bank to increase the limit on that card. opening cards can make some lenders nervous. having a new card close to when you are applying for a mortgage or a car loan can make them less likely to lend you the max. you have to decide: are you trying to buildup your credit limit? or your credit score?", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "companies that use their cash to buy back stock, issue dividends, etc. how does this this typically affect share price?", "role": "user" }, { "content": "if a company is valued correctly, then paying dividends should lower the share price, and buying back shares should leave the share price unchanged. if the share price is $100, and the company pays a $10 dividend, then either its cash goes down by $10 per share, it is has to borrow money for the same amount, or some mixture. either way, the value of the company has gone down by $10 per share. if the share price is $100, and the company buys back 10 percent of its shares, then it also has to find the money, just as for the dividend, and the value of the company goes down by 10 percent. however, the number of shares also goes down by 10 percent, so the amount of value per share is the same, and the share price should stay unchanged. now there are psychological effects. many people like getting paid dividends, so they will want to own shares of a company paying dividends, so the share price goes up. similar with a share buyback; the fact that someone buys huge amounts of shares drives the price up. both effects are purely psychological. a buyback has another effect if the shares are not valued correctly. if the company is worth $100 per share but for some reason the shareprice is down to $50, then after the buyback the value per share has even gone up. basically the company buys from stupid investors, which increases the value for clever investors holding on to their shares. if the shareprice were $200, then buying back shares would be a stupid move for the company.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what does it mean sell on ask , sell on bid in stocks?", "role": "user" }, { "content": "honestly, i wonder if the other answerers aren't overthinking it. their answers are detailed and correct, but what your coach may be saying is this: when you have bought a stock, on cash or margin, and you are watching it rise you are evaluating when you sell on the price of the stock you are seeing. in reality, you should look at the bid (price buyers will give you for the stock) and ask (price sellers will charge you for the stock) prices. if the stock is going up, odds are the price of the stock is very close to the ask price because it is purchases that are driving it up, but that's not what you're going to get when you sell. you're going to get something around the bid price. if the spread between the two is large (i.e. a volatile stock) this could be many cents or more lower than the ask price. therefore, what your coach may mean by \"selling on ask\" is you're using the stock price when it's equal or close to the ask price to decide when to sell, instead of letting the stock peak and drop (when its price will approach the bid price) or letting the trailing bid offers catch up to your desired sell point and selling then (i.e. letting the stock point grow past your sell point, dragging the bid price up with it). just a thought, but that sounds like a term a coach would come up with to mean selling and getting less than you thought you were going to from the sale. (i know it's a necro reply, but the interwebs are immortal and people come via google... i did)", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "ideas for patenting/selling a trading strategy", "role": "user" }, { "content": "if you have a great technical trading system that gets you winning trading 80-85% of the time in backtesting, the question should be why are you not trading it? to get a better idea of how good your trading system is you should work out your expectancy per trade. this will tell you how much you should make on average for every trade you take. expectancy not only considers your win rate but also you win size to loss size ratio. for example if you are getting winning trades 80% of the time but your average win size is $100, and your 20% of losses average $500, then you will still be losing money. you should be aiming for an average win size of at least 2.5 to 3 times you average loss size. this will provide you a profitable trading system even if your win rate is 50%. if your trading system is really that good and provides a win size of at least 2.5 times your loss size then you should be actively trading it. also, if you put your trading system out there in the public domain together with your trading results you will actually find that, quite opposite to what the consensus above is, your results from your trading plan should actually improve further. the more people acting on the outcome of a signal in the same direction the higher the probability that the movement in the desired direction will actually occur. if you are looking to make money from your trading ideas, no one will pay anything unless you have real results to back it up. so if you are so confident about your system you should start trading it with real money. of course you should start off small and build it up over time as your results eventuate as per your simulations.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "espp in the uk - worth it? disqualifying / qualifying sales?", "role": "user" }, { "content": "espp is common among us companies, often with a framework similar to your outline. in the us, some espps allow sales of shares to be considered qualifying (subject to capital gains rather than ordinary income tax) if they are sold at least 2 years after the enrollment date and at least 1 year after the purchase date. these details can vary from one plan to another and will be stated in the company's espp enrollment documents. do look at the high and low values of the stock over the last year. if it swings up and down more than 15% (or whatever the discount is), then that risk should be a factor in your decision. if the stock is trending upward over the long term and you are confident in the durability of the company, then you might favor holding.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is an interest-only mortgage a bad idea?", "role": "user" }, { "content": "if you took a fixed loan, but paid it off at the accelerated rate, you would ultimately pay less total dollars in interest. so compare the actual amount paid in interest over the course of the loan rather than the interest rate itself. that should be your answer. also, plan on failing in your plan to pay it off and see how that will affect you.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why buy insurance?", "role": "user" }, { "content": "i keep it simple. here's what i learned when i took personal financial planning: insurance is for low likelihood, high-impact events.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "am i able to conduct a private sale of public shares at a price that i determine?", "role": "user" }, { "content": "yes, you can do that, but you have to have the stocks issued in your name (stocks that you're holding through your broker are issued in \"street name\" to your broker). if you have a physical stock certificate issued in your name - you just endorse it like you would endorse a check and transfer the ownership. if the stocks don't physically exist - you let the stock registrar know that the ownership has been transferred to someone else. as to the price - the company doesn't care much about the price of private sales, but the taxing agency will. in the us, for example, you report such a transaction as either a gift (irs form 709), if the transaction was at a price significantly lower than the fmv (or significantly higher, on the other end), or a sale (irs form 1040, schedule d) if the transaction was at fmv.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "which shareholders cause news-driven whole market stock swings?", "role": "user" }, { "content": "the people who cause this sort of sell-off immediately are mostly speculators, short-term day-traders and the like. they realize that, because of the lowered potential for earnings in the future, the companies in question won't be worth as much in the future. they will sell shares at the elevated price, including sometimes shares that they borrow for the explicit purpose of selling (short selling), until the share price is more reasonable. now, the other question is why the companies in question won't sell for as much in the future: even if every other company in the world looks less attractive all at once (global economic catastrophe etc) people have other options. they could just put the money in the bank, or in corporate bonds, or in mortgage bonds, or treasury bonds, or some other low-risk instrument, or something crazy like gold. if the expected return on a stock doesn't justify the price, you're unlikely to find someone paying that price. so you don't actually need to have a huge sell-off to lower the price. you just need a sell-off that's big enough that you run out of people willing to pay elevated prices.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what would i miss out on by self insuring my car?", "role": "user" }, { "content": "as you suspected, there is more than just car replacement taken care of by insurance (some of them are pointed out in chad's story:", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what is the compound annual growth rate of the major markets?", "role": "user" }, { "content": "under construction, but here's what i have so far: schwab data from 1970-2012: about.com data from 1980-2012:", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "can i negotiate a 0% transaction fee with my credit card company?", "role": "user" }, { "content": "tl;dr summary: 0% balance transfer offers and \"free checks usable anywhere\" rarely are a good deal for the customer. 0% rate balance transfer offers (and the checks usable anywhere including payment of taxes) come with a transaction fee because the credit card company is paying off the balance on the other card (or the tax or the electric bill) in the full amount of $x as stated on the other card statement or on the tax/electric bill). this is in contrast to a purchase transaction where if you buy something for $x, you pay the card company $x but the card company pays the merchant something less than $x$. (of course, the merchant has jacked up the sale price of the item to pass on the charge to you.) can you get the credit card company to waive the transaction fee? you can try asking them but it is unlikely that you will succeed if your credit score is good! i have seen balance transfer offers with no transaction fees made to people who have don't have good credit scores and are used to carrying a balance on their credit cards. i assume that the company making the offer knows that it will make up the transaction fee from future interest payments. a few other points to keep in mind with respect to using a 0% balance transfer offer to pay off a student loan (or anything else for that matter):", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "can googlefinance access total return data?", "role": "user" }, { "content": "this is the same answer as for your other question, but you can easily do this yourself: ( initial adjusted close / final adjusted close ) ^ ( 1 / ( # of years sampled) ) note: \"# of years sampled\" can be a fraction, so the one week # of years sampled would be 1/52. crazy to say, but yahoo finance is better at quick, easy, and free data. just pick a security, go to historical prices, and use the \"adjusted close\". money.msn's best at presenting finances quick, easy, and cheap.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "i'm 13. can i buy supplies at a pet store without a parent/adult present?", "role": "user" }, { "content": "my 12 year old routinely makes purchases with cash or a gift card (either a store's card or a visa/amex card that acts like credit card but is a gift card) and has never had an issue. clothing, make-up, bath items, etc. i understand in some areas you need to be over 18 to buy certain markers, spraypaint, or other propellant items that can be fatal if inhaled. i see little issue with buying pet supplies, but it wouldn't hurt to have your sibling nearby if you think there will be an issue.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "if earning as freelancer, is it better to be a sole trader or limited company?", "role": "user" }, { "content": "as i understand it (please correct me if i'm wrong, i've looked at this before and i've been a sole trader briefly but i've never formed a ltd company) there are pros and cons to forming a limited company. pros cons", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "hsbc hong kong's deposit plus product: what is it, and what strategies to employ?", "role": "user" }, { "content": "hsbc hong kong's “deposit plus” product\" the same as \"dual currency product\" . it's currency link sell base currency call / alternative currency put fx option it's not protected by the deposit insurance system in hk you can search key word \"dual currency product\" & \"dual currency investment\" & \"dual currency deposit\" the only one of the world's foreign exchange structured product book 『雙元貨幣產品 dual currency product』 isbn 9789574181506", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "clarify microsoft's explanation of mirr", "role": "user" }, { "content": "the mirr formula uses the finance rate to discount negative cash flows, but since the only negative cash flow in the example in in the current period, there's nothing to discount. it's meant to solve problems with irr like when there are both positive and negative cash flows, which can result in multiple answers for irr. the example they give isn't a good one for mirr because it's a simple spend now, earn later scenario, which irr is perfectly fine for. if you add a negative cashflow somewhere after the first one you'll see the answer change with difference financing rates.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "diversify or keep current stock to increase capital gains", "role": "user" }, { "content": "the biggest challenge with owning any individual stock is price fluctuation, which is called risk. the scenarios you describe assume that the stock behaves exactly as you predict (price/portfolio doubles) and you need to consider risk. one way to measure risk in a stock or in a portfolio is sharpe ratio (risk adjusted return), or the related sortino ratio. one piece of advice that is often offered to individual investors is to diversify, and the stated reason for diversification is to reduce risk. but that is not telling the whole story. when you are able to identify stocks that are not price correlated, you can construct a portfolio that reduces risk. you are trying to avoid 10% tax on the stock grant (25%-15%), but need to accept significant risk to avoid the 10% differential tax ($1000). an alternative to a single stock is to invest in an etf (much lower risk), which you can buy and hold for a long time, and the price/growth of an etf (ex. spy) can be charted versus your stock to visualize the difference in growth/fluctuation. look up the beta (volatility) of your stock compared to spy (for example, ibm). compare the beta of ibm and tsla and note that you may accept higher volatility when you invest in a stock like tesla over ibm. what is the beta of your stock? and how willing are you to accept that risk? when you can identify stocks that move in opposite directions, and mix your portfolio (look up beta balanced portolio), you can smooth out the variability (reduce the risk), although you may reduce your absolute return. this cannot be done with a single stock, but if you have more money to invest you could compose the rest of your portfolio to balance the risk for this stock grant, keep the grant shares, and still effectively manage risk. some years ago i had accumulated over 10,000 shares (grants, options) in a company where i worked. during the time i worked there, their price varied between $30/share and < $1/share. i was able to liquidate at $3/share.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why is early exercise generally not recommended for an in-the-money option?", "role": "user" }, { "content": "for a deep in the money, it almost makes no difference because the intrinsic value, the price of the option, is seldom far above the liquidation value, the price of the underlying less the strike price. for an at the money, ceteris paribus, an early exercise would immediately cut the value of the option to 0; however, life is not so simple as jb king has shown. purely theoretically, for an at or near the money option, an early exercise will be an instantaneous cost because the value after exercise is less than the previously trading or implied option price.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "pending euro payment to a usd account", "role": "user" }, { "content": "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’.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "to pay off a student loan, should i save up a lump sum payoff payment or pay extra each month?", "role": "user" }, { "content": "if the savings rate is the same as the loan rate, mathematically it doesn't make any difference whether you pay down the loan more and save less or vice versa. however, if the loan rate is higher than the savings rate it's better to pay it down as fast as possible. the chart below compares paying down the loan and saving equally (the gradual scenario), versus paying down the loan quickly at 2 x $193 and then saving 2 x $193. the savings rate, for illustration, is 2%. paying quickly pays down the loan completely by month 51. on the other hand, in the gradual scheme the loan can't be paid down (with the savings) until month 54, which then leaves 3 months less for saving. in conclusion, it's better to pay down the higher rate loan first. practically speaking, it may be useful to have some savings available.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "should i collect receipts after paying with a card?", "role": "user" }, { "content": "in this answer, i won't elaborate on the possibilities of fraud (or pure human error), because something can always go wrong. i will, however, explain why i think you should always keep receipts. when the (monthly or so) time comes to pay your credit card bill, your credit card company sends you a list of transactions. that list has two primary purposes, both of which i would consider equally important: while for the former item, a receipt is not necessary (though it certainly does not hurt showing the receipt along with the bill to provide further proof that the payment was indeed connected to that bill), the latter point does require you to store the receipts so you can check, item-by-item, whether each of the sums is correct (and matched with a receipt at all). so, unless you can actually memorize all the credit card transactions you did throughout the past one or two months, the receipts are the most convenient way of keeping that information until the bill arrives. yes, your credit card company probably has some safeguards in place to reveal fraud, which might kick in in time (the criteria are mostly heuristical, it seems, with credit cards or legitimate transactions here getting blocked every now and then simply because some travelling of the actual owner was misinterpreted as theft). however, it is your money, it is your responsibility to discover any issues with the bill, just as you would check the monthly transaction list from your bank account line by line. ultimately, that is why you sign the vendor copy of the receipt when buying something offline; if you discover an issue in your list of transactions, you have to notify your credit card company that you dispute one of the charges, and then the charging vendor has to show that they have your signature for the respective transaction. so, to summarize: do keep your receipts, use them to check the list of transactions before paying your credit card bill. edit: the receipt often cannot be replaced with the bill from the vendor. the bill is useful for seeing how the sum charged by the respective vendor was created, but in turn, such bills often do not contain any payment information, or (when payment was concluded before the bill was printed, as sometimes happens in pre-paid scenarios such as hotel booking) nondescript remarks such as \"- payment received -\", without any further indication of which one of your credit cards, debit cards, bank accounts, stored value cards, or cash was used.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "does gold's value decrease over time due to the fact that it is being continuously mined?", "role": "user" }, { "content": "the previous answers have raised very good points, but i believe one facet of this has been neglected. while it's true that the total accessible supply of gold keeps growing(although rather slowly as was mentioned earlier) the fact remains that gold, like oil, is a non-renewable natural resource. so, at some point, we are going to run out of gold to mine. due to this fact, i believe gold will always be highly valued. of course it can certainly always fluctuate in value. in fact, i expect in the reasonably near future to see a decline in the price of gold due to investors selling it en masse to re-enter the stock market when the economy has recovered more substantially.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "can i get a mortgage from a foreign bank?", "role": "user" }, { "content": "simple answer yes you can, there are loads here are some links : world first , baydon hill , ipf just googling \"foreign currency mortgage\", \"international mortgage\", or \"overseas mortgage\" gets you loads of starting points. i believe its an established and well used process, and they would be \"classified\" as a \"normal\" mortgage. the process even has its own wiki page incidentally i considered doing it myself. i looked into it briefly, but the cost of fee's seemed to outweigh the possible future benefits of lower interest rates and currency fluctuations.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "advantages of paying more of your mortgage while you know you won't continue to live there your whole life", "role": "user" }, { "content": "i will add one thought on to this thread. this is a financial concept called \"net present value\". in plain english, it means \"what's the best use for your money right now?\" so, let's say you have an extra €300/month which is not being spent on living expenses. if you leave that money under your pillow (or spend it on beer or fancy electronics!) instead of paying off your startersloan early, that is costing you 300*(0.04/12) per month, every month. so €1/month, or €12/year. this is cumulative for the life of your loan. so not paying €300 this month will ultimately cost you €120 assuming you keep the loan open for 10 years. if you're saying \"pay my debts or spend the money on a snappy smartphone?\" the answer is that you should pay your debts. now, here's the important part. let's suppose you have a better use for the money than beer or electronics. let's suppose you have a mutual fund which will reliably provide you with a return of 10% a year. if you put that €300/month into a high-yield fund, and if the returns are consistent, you are still paying that €12/year (because you invested elsewhere and didn't pay your debts), but you are realizing profits of 300*(0.1/12)=€2.5/month on the invested money. €2.5-1=€1.5/month, which is a net gain. so, in some cases, paying off your debt may not be the best use of your money. there are a number of other questions involved which are related to your exposure to capital gains taxes, incentives or disincentives for holding debt, &c. &c. these are generally country specific. a poster above who seems to be familiar with netherlands law did a good explanation of some of those incentives. i'm in the us, and our incentive and disincentive system is different. tl;dr: it depends.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why would refinancing my mortgage increase my pmi, even though rates are lower?", "role": "user" }, { "content": "the pmi rate is calculated at the time your mortgage is underwritten to be terminated at the point where you have 20% equity in your home. it is calculated based off of default risks based on your current equity value at the time of the loan. so if you got your mortgage before the banking crisis those risk charts have changed dramatically and not in your favor. so lets say you have a 100k home which you put 10k down so you have a mortgage of 90k. since you have accumulated an additional 5k equity so payoff value is now 85k. if you refinance your mortgage and the home values in your area have dropped 15% you now are borrowing 100% of the value of your home. so you have higher risk from being at 100% as opposed to 90%. and the pmi is for the 20% of equity you do not have that the bank can not expect to recover. so when you originally bought the house your pmi pay out was 10k. at 85k value and 100% borrowed the pmi payout will be closer to 18k. while you may still be able to sell your home for the original value when they do the refinance calculations they use what your area has trended. if that is the case you maybe be able get an actual appraisal to use but that will come out of your pocket. *disclaimer: these are simplifications of how the whole complex process works if you call the banker they can explain exactly why, show you the numbers, and help you understand your specific circumstances. *", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "analyze a security using benjamin graham's defensive investor criteria", "role": "user" }, { "content": "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", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how to transfer money to yourself internationally?", "role": "user" }, { "content": "hmmm... as far as i know wire transfers are still the best option. if you make sure your us account accepts international wires for free (like td bank does) you'll have eliminated most of the costs (assuming your foreign bank doesn't charge too much for wiring the funds in the first place). also, if your able to, you could consider wiring 6 or so months at the same time. i'm not familiar with xe.com but it seems it's not set up for transferring money so much as for trading currencies. while you could probably use it to transfer funds if you'd link both your accounts it seems a rather complicated way to go about things. paypal could be an option if they'd allow you to set up an account in each country (or if you have a relative that could help out), but it gets more expensive than wire-transfers quickly. as for getting the best exchange rate... i've given up on that a long time ago and have accepted that as the cost of living internationally :).", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why buy stock of a company instead of the holding company who has more than 99% of the stocks", "role": "user" }, { "content": "in a situation like this, i presume you'd invest in the child company if you thought that the child company would increase in value at a higher rate than the parent. you'd invest in the parent company if you thought the parent company would perform well as a whole, but you did not want to assume the risk of an individual company underneath it. say the child company is worth 100 million, and the parent company is worth 500 million. you've invested a sum of money in the child company. the child company performs very well, and increases in value by, say, 20 million. as the parent company owns the child, we could say it also increases in value by roughly 20 million. the difference is proportional - your investment in the child sees a 20% gain in value, whereas your investment in the parent sees a 4% gain in total value, as in this example the parent company, which owns nearly 100% of the child company, is worth 5x more and thus proportionally sees 1/5 the increase in value, due to it being worth more as a whole. think of it similarly to a mutual fund or etf that invests in many different stocks on the market. as the market does well, that mutual fund or etf does well, too. as the mutual fund is made up of many individual stocks, one stock performing very well, say at a 10-20% increase in value, does not raise the value of the etf or mutual fund by 10-20%. the etf / mutual fund will perform slightly better (assuming all other components remain equal for this example), but only proportionally to the fraction of it that's made up of the stock that's performing well.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how can i predict which way mortgage rates are moving?", "role": "user" }, { "content": "if economic conditions are weakening, i.e. unemployment rising, business and consummer confidence dropping, etc., you can expect interest rates and thus mortgage rates to drop. if economic conditions are strengthening you can expect interest rates and thus mortgage rates to start rising. as you are in the us, and with official interest rates there at 0.25% there is not much room for these rates to fall further. i am in australia, with official interest rates at 3.75%, and with the economic weakness in the us and europe and with china slowing down, we can expect our rates to fall further over the next year. regarding your timeframe of one to two weeks, unless there is a decision on rates in the us in the next week i don't think there would be much change, especially with rates there at record lows. you are probably best to shop around for the best rates now and refinance once you have found one you are happy with.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how could a company survive just on operations cash flow, i.e. no earnings?", "role": "user" }, { "content": "it depends on the definition of earnings. a company could have revenue that nets in excess of expenses, so from that perspective a good cash flow or ebitda, but have debt servicing costs, taxes, depreciation, amortization, that alters that perspective. so if a company is carrying a large debt load, then the bondholders are in the position to capture any excess revenues through debt service payments and the company is in a negative equity positions (no equity or dividends payable to shareholders) and has not produced earnings. if a company has valuable preferred shares issued and outstanding, then depending on the earnings definition, there may be no earnings (for the common stock) until the preferences are satisfied by the returns. so while the venture itself (revenues minus costs) could be cash flow positive, this may not be sufficient to produce \"earnings\" for shareholders, whose claim on the company still entitles them to zero current liquidation value (i.e. they get nothing if the company dissolves immediately - all value goes to bondholders or preferred). it could also be that taxes are eating into revenue, or the depreciation of key assets is greater than the excess of revenues over costs (e.g. a bike rental company by the beach makes money on a weekly basis but is rusting out half its stock every 3 months and replacement costs will overwhelm the operating revenues).", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "made more than $600. company does not issue 1099-misc's. enter income as general income?", "role": "user" }, { "content": "i'm not sure how this gets entered in turbotax, but this income from the company should be included in the schedule c (or c-ez) line 1 gross receipts total, along with all of your 1099-misc income from your business and any other income that your business took in. you don't need a 1099 from them, and the irs doesn't care (at least from your perspective) if you got a 1099 or not; in fact, they probably expect you to have some non-1099 income. we don't know why the company chose not to issue 1099 forms, but luckily it isn't your concern. you can fill out your tax return properly without it. note: this answer assumes that you didn't have any tax withheld from your checks from this company. if you did have tax withheld, you'll need to insist on a 1099 to show that.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "are all financial advisors compensated in the same way?", "role": "user" }, { "content": "no, they certainly are not compensated the same way. some are paid by commission that they earn from the products they sell (ie, certain mutual funds, insurance, etc.) others are paid for their advice based on an hourly fee, or a percentage of the portfolio you have to invest. this is a great question, because too many of us just assume that if someone is in the business, they will give trustworthy advice. this may certainly be the case, but think about it, the financial planner at your bank (who also is a mutual fund specialist - just flip that handy business card over) is employed by bank x. bank x sells mutual funds, gic's, insurance, all kinds of great products. that bank x employee is not likely to tell you about products from bank z down the street that might be a better fit for you. find a fee based planner, someone you can pay by the hour for advice, and let them help you review products across the industry. it's like asking your bank for mortgage advice...they will discuss the options they offer, but may not tell you about a deal down the street. using a mortgage broker helps you find the best deal across the board. i believe the current issue of moneysense magazine has an insert discussing planners. their magazine and website (www.moneysense.ca) are good sources of reliable, canadian financial advice.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is housing provided by a university as employer reported on 1040?", "role": "user" }, { "content": "you should ask a cpa or tax lawyer to what extent living in specific housing provided by the employer as a job requirement is exempt from taxation. you might find a nice surprise. your tax professional can also help you to report the items properly if mis-reported. much of this is in the article you cite in the question, but perhaps a look at some of the original sources is warranted and will show why some expert advice might be useful. i would argue that an ra who is required to police and counsel undergrads in a college dorm in exchange for a room or a flat is closer to a worker with quarters on a ship or at an oil well than a full professor who receives a rental home in a neighborhood near the university as a benefit. in the first case living at the provided premises is necessary to do the job, but in the second case it is merely a benefit of the job. the irs publication 15-b guidance on employer provided housing is not entirely clear, so you might want to get some additional advice: lodging on your business premises you can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests. it is furnished on your business premises. it is furnished for your convenience. the employee must accept it as a condition of employment. different tests may apply to lodging furnished by educational institutions. see section 119(d) of the internal revenue code for details. if you allow your employee to choose to receive additional pay instead of lodging, then the lodging, if chosen, isn’t excluded. the exclusion also doesn't apply to cash allowances for lodging. on your business premises. for this exclusion, your business premises is generally your employee's place of work. for example, if you're a household employer, then lodging furnished in your home to a household employee would be considered lodging furnished on your business premises. for special rules that apply to lodging furnished in a camp located in a foreign country, see section 119(c) of the internal revenue code and its regulations. for your convenience. whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. you furnish the lodging to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. this is true even if a law or an employment contract provides that the lodging is furnished as pay. however, a written statement that the lodging is furnished for your convenience isn't sufficient. condition of employment. lodging meets this test if you require your employees to accept the lodging because they need to live on your business premises to be able to properly perform their duties. examples include employees who must be available at all times and employees who couldn't perform their required duties without being furnished the lodging. it doesn't matter whether you must furnish the lodging as pay under the terms of an employment contract or a law fixing the terms of employment. example of qualifying lodging. you employ sam at a construction project at a remote job site in alaska. due to the inaccessibility of facilities for the employees who are working at the job site to obtain lodging and the prevailing weather conditions, you furnish lodging to your employees at the construction site in order to carry on the construction project. you require that your employees accept the lodging as a condition of their employment. you may exclude the lodging that you provide from sam's wages. additionally, since sufficient eating facilities aren’t available near your place of employment, you may also exclude meals you provide to sam from his wages, as discussed under meals on your business premises , later in this section. example of nonqualifying lodging. a hospital gives joan, an employee of the hospital, the choice of living at the hospital free of charge or living elsewhere and receiving a cash allowance in addition to her regular salary. if joan chooses to live at the hospital, the hospital can't exclude the value of the lodging from her wages because she isn't required to live at the hospital to properly perform the duties of her employment. one question would be how the conflict with irc 119(d) is resolved for someone who must live in the dorm to watch over the dorm and its undergrads. here's 26usc119(d) from lii: (d) lodging furnished by certain educational institutions to employees (1) in general in the case of an employee of an educational institution, gross income shall not include the value of qualified campus lodging furnished to such employee during the taxable year. (2) exception in cases of inadequate rent paragraph (1) shall not apply to the extent of the excess of— (a) the lesser of— (i) 5 percent of the appraised value of the qualified campus lodging, or (ii) the average of the rentals paid by individuals (other than employees or students of the educational institution) during such calendar year for lodging provided by the educational institution which is comparable to the qualified campus lodging provided to the employee, over (b) the rent paid by the employee for the qualified campus lodging during such calendar year. the appraised value under subparagraph (a)(i) shall be determined as of the close of the calendar year in which the taxable year begins, or, in the case of a rental period not greater than 1 year, at any time during the calendar year in which such period begins. (3) qualified campus lodging for purposes of this subsection, the term “qualified campus lodging” means lodging to which subsection (a) does not apply and which is— (a) located on, or in the proximity of, a campus of the educational institution, and (b) furnished to the employee, his spouse, and any of his dependents by or on behalf of such institution for use as a residence. (4) educational institution, etc. for purposes of this subsection— (a) in generalthe term “educational institution” means— (i) an institution described in section 170(b)(1)(a)(ii) (or an entity organized under state law and composed of public institutions so described), or (ii) an academic health center. (b) academic health centerfor purposes of subparagraph (a), the term “academic health center” means an entity— (i) which is described in section 170(b)(1)(a)(iii), (ii) which receives (during the calendar year in which the taxable year of the taxpayer begins) payments under subsection (d)(5)(b) or (h) of section 1886 of the social security act (relating to graduate medical education), and (iii) which has as one of its principal purposes or functions the providing and teaching of basic and clinical medical science and research with the entity’s own faculty.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "creating s-corp: should i name my wife as a director/shareholder?", "role": "user" }, { "content": "there are many aspects to consider in deciding what sort of company you want to form. instead of an s-corporation, you should determine whether it would be better to form a limited liability company (llc), limited partnership (lp) or even a professional company (pc). littleadv is correct: there is minimal benefit in forming an s-corp with you and your wife as the shareholders, if you will be the only contributor-worker. there are costs associated with an s-corporation, or any corporation, that might outweigh benefits from more favorable tax treatment, or personal protection from liability: filing fees and disclosure rules vary from state to state. for example, my father was a cardiologist who had no employees, other than my grandmother (she worked for free), in a state with income taxes (nm). he was advised that a pc was best in new mexico, while an s-corp was better in florida (there are no personal income taxes in florida). the only way to know what to do requires that you consult an accountant, a good one, for guidance.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "does an owner of a bond etf get an income even if he sells before the day of distribution?", "role": "user" }, { "content": "your etf will return the interest as dividends. if you hold the etf on the day before the ex-dividend date, you will get the dividend. if you sell before that, you will not. note that at least one other answer to this question is wrong. you do not need to hold on the record date. there is usually 2 days (or so) between the ex-date and the record date, which corresponds to the number of days it takes for your trade to settle. see the rules as published by the sec: http://www.sec.gov/answers/dividen.htm", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what are some sources of information on dividend schedules and amounts?", "role": "user" }, { "content": "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", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "where do stock traders get realtime updates on fed announcements? is there a feed i could scrape?", "role": "user" }, { "content": "tthe easiest place to see fed announcements as soon as they're published is the federal reserve itself. if you want the information as soon as it's made publicly available, scrape the federal reserve press releases. i assume you're most interested in the announcements after the fomc meetings, so you might want to scrape the fomc calendar. the statements come out right after the meeting, and the minutes are released three weeks later. if you want to catch instances where the minutes are leaked, that's a bit trickier. for a lot of other market data, services providers like bloomberg, reuters, etc. are usually the best bet for realtime information, since these companies earn their revenue and keep their customers by providing the data as fast as humanly possible. they may offer an analysis or a distilled version of the fomc minutes for traders to use within minutes of the announcement itself (i'm not sure if they do or not), but the announcements themselves will come from the federal reserve itself first and foremost.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "are exchange-traded funds (etfs) less safe than regular mutual funds?", "role": "user" }, { "content": "i wonder if etf's are further removed from the actual underlying holdings or assets giving value to the fund, as compared to regular mutual funds. not exactly removed. but slightly different. whenever a fund want to launch an etf, it would buy the underlying shares; create units. lets say it purchased 10 of a, 20 of b and 25 of c. and created 100 units for price x. as part of listing, the etf company will keep the purchased shares of a,b,c with a custodian. only then it is allowed to sell the 100 units into the market. once created, units are bought or sold like regular stock. in case the demand is huge, more units are created and the underlying shares kept with custodian. so, for instance, would vti and total stock market index admiral shares be equally anchored to the underlying shares of the companies within the index? yes they are. are they both connected? yes to an extent. the way vanguard is managing this is given a index [investment objective]; it is further splitting the common set of assets into different class. read more at share class. the portfolio & management gives out the assets per share class. so vanguard total stock market index is a common pool that has vti etf, admiral and investor share and possibly institutional share. is vti more of a \"derivative\"? no it is not a derivative. it is a mutual fund.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "does the fed keeping interest rates low stimulate investment in the stock market and other investments?", "role": "user" }, { "content": "investopedia has this note where you'd want the contrapositive point: the interest rate, commonly bandied about by the media, has a wide and varied impact upon the economy. when it is raised, the general effect is a lessening of the amount of money in circulation, which works to keep inflation low. it also makes borrowing money more expensive, which affects how consumers and businesses spend their money; this increases expenses for companies, lowering earnings somewhat for those with debt to pay. finally, it tends to make the stock market a slightly less attractive place to investment. as for evidence, i'd question that anyone could really take out all the other possible economic influences to prove a direct co-relation between the federal funds rate and the stock market returns. for example, of the dozens of indices that are stock related, which ones would you want that evidence: total market, large-cap, small-cap, value stocks, growth stocks, industrials, tech, utilities, reits, etc. this is without considering other possible investment choices such as direct real estate holdings, compared to reits that is, precious metals and collectibles that could also be used.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "if stock price drops by the amount of dividend paid, what is the use of a dividend", "role": "user" }, { "content": "i'm fairly convinced there is no difference whatsoever between dividend payment and capital appreciation. it only makes financial sense for the stock price to be decreased by the dividend payment so over the course of any specified time interval, without the dividend the stock price would have been that much higher were the dividends not paid. total return is equal. i think this is like so many things in finance that seem different but actually aren't. if a stock does not pay a dividend, you can synthetically create a dividend by periodically selling shares. doing this would incur periodic trade commissions, however. that does seem like a loss to the investor. for this reason, i do see some real benefit to a dividend. i'd rather get a check in the mail than i would have to pay a trade commission, which would offset a percentage of the dividend. does anybody know if there are other hidden fees associated with dividend payments that might offset the trade commissions? one thought i had was fees to the company to establish and maintain a dividend-payment program. are there significant administrative fees, banking fees, etc. to the company that materially decrease its value? even if this were the case, i don't know how i'd detect or measure it because there's such a loose association between many corporate financials (e.g. cash on hand) and stock price.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "alternatives to intuit's paytrust service for online bill viewing and bill payment?", "role": "user" }, { "content": "(six years later...) i've used checkfree for over 20 years, and my uncle started using it back in the early 1980s through a 300 baud modem. it has e-bills, edi bills that you schedule yourself, and will also mail checks to people and small businesses. you can make your payments from an unlimited number of banks, can schedule multiple recurring payments for the same bill (i find that useful for when buying large/expensive items by cc: i create a different payment schedule for each), plus ad hoc payments.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what does investment bank risk during ipo?", "role": "user" }, { "content": "there are two kinds of engagements in an ipo. the traditional kind where the banks assume the risks of unsold shares. money coming out of their pockets to hold shares no one wants. that is the main risk. no one buying the stock that the bank is holding. secondly, there is a \"best efforts\" engagement. this means that bank will put forth its best effort to sell the shares, but will not be on the hook if any don't sell. this is used for small cap / risky companies. source: author/investment banker", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what is the rate of return for a security when there is no risk-free rate (capm)?", "role": "user" }, { "content": "for starters, the risk-free rate has nothing to do with stocks. it would be independent of anything. it pays out the same return in all states of nature. the definition of a risk-free asset is that regardless of how the universe turns out, including a meteor striking the earth killing everyone but the recipient, then the payout would happen exactly as planned. one could imagine a computer still being on, connected to a power supply and printing a check. most people use the 90-day t-bill as the risk-free rate. a beta greater than one implies it is more volatile than the market, not that it moves more perfectly. the capm should not be used for this. cryptocurrencies should not be used with this model because they have valuation dynamics related to the new issue of coins. in other words, they have non-market price movements as well as market price movements. in general, you should not use the capm because it doesn't work empirically. it is famous, but it is also wrong. a scientific hypothesis that is not supported by the data is a bad idea. my strong recommendation is that you read \"the intelligent investor,\" by benjamin graham. it was last published in 1972, and it is still being printed. i believe warren buffett wrote the current forward for it. always go where the data supports you and never anywhere else, no matter how elegant. finally, unless you are doing this like a trip to vegas, for fun and willing to take the losses, i would avoid cryptocurrencies because you don't know what you are doing yet. it is obvious from the posting. i have multiple decades working in every type of financial institution and at every level, bottom to top. i also have a doctorate, and i am an incredible researcher. i am professionally qualified in three different disciplines. if you want to learn how to do this, start with the \"intelligent investor.\" get a basic book on accounting and learn basic accounting. pick up economics textbooks at least through \"intermediate\" for both microeconomics and macroeconomics. get william bolstad's book \"introduction to bayesian statistics.\" you will need them for reasons that go very far beyond this post. trust me; you want to master that book. find a statistician and ask them to teach it to you as a special topics course. it will help you as both either a marine officer or a naval officer. then after that pick up a copy of \"security analysis.\" either the 1943 copy (yes it is in print) by benjamin graham if you feel good about accounting, or the 1987 copy by cottle under the graham/dodd imprimatur. then, if you are still interested in cryptocurrencies and they will be blasé by then, then pick up an economics textbook on money. if i were you, i would learn about yap money, commodity money, and prison money first, then you might understand why a cryptocurrency may not be an investment for you.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "vat and duties payable when importing personal goods from switzerland and the channel islands to the eu?", "role": "user" }, { "content": "http://www.hmrc.gov.uk/customs/tax-and-duty.htm#3 explains the import vat situation quite well. as for who enforces and collects it, if you're talking about buying online and having it shipped to you then you'll notice on the parcel a customs sticker declaring the contents and value. it is the responsibility of the courier company to collect any duty due from you and pass it on to hmrc. in practice what this means is that you receive a card or note from the courier saying \"we're impounding your package until you pay the import duty\" and they usually charge a fee on top of the duty itself. of course you can always go out there yourself and bring something back, but then it is your responsibility to declare it at the customs checkpoint when you enter the country.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why did the swiss national bank fix the eur/chf exchange rate at chf 1.20?", "role": "user" }, { "content": "due to the issues in the eurozone, many foreign investors were buying swiss francs as a hedge against a euro devaluation. they were in effect treating the franc like gold, silver or some other commodity with perceived intrinsic value. this causes huge problems from the swiss, as the value of the franc increased and their exports became more expensive for foreigners to purchase. things were getting bad enough that the swiss in some places were travelling to germany to buy groceries! to enforce this \"fixing\" of the franc, the swiss central bank announced that they would buy foreign currency in unlimited quantities by printing francs. in reality, just announcing that they were going to do this was sufficient to discourage foreign investors from loading up on francs. npr's planet money did a really good job covering this topic:", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "a friend wants to use my account for a wire transfer. is this a scam or is it legitimate?", "role": "user" }, { "content": "i know people who work in the gulf and most contracts are of the 14 days on/ 14 days (or so) off flavor. i've never heard of someone being onboard a ship or platform for a year. i bet this is a scam.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "incentive stock option (iso) tax question - more specific this time", "role": "user" }, { "content": "alternatively you could exercise 12000 shares for $36000 and immediately sell 7200 shares to recover your exercise price. then you use the remaining 4800 share to pay the exercise price of the remaining 8000 options. both scenarios are equivalent but may have different fees associated, so it's worth checking the fine print. tax wise: the above example is \"cash neutral before taxes\". the taxes associated with these transaction are substantial, so it's highly recommended to talk with a tax adviser. \"cash neutral after taxes\" depends highly on your specific tax situation.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is there a yahoo finance ticker for nymex crude oil front month?", "role": "user" }, { "content": "yahoo finance doesn't offer this functionality; i remember looking for this exact feature a couple of years ago for coffee futures. your best option is to look at the futures chain. however, yahoo finance's future chains aren't always complete, since you'll notice that the futures chain for nymex crude oil omit the june contract. the contract still exists, but yahoo doesn't list it in its own futures chain or in the future chain for may.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how do i protect myself from a scam if i want to help a relative?", "role": "user" }, { "content": "what can i do to help him out, but at the same time protect myself from any potential scams? find out why he can't do this himself. whether your relative is being sincere or not, if he owns both accounts then he should be able to transfer money between them by himself. if you can find a way to solve that issue without involving your bank account, so much the better. don't settle for \"something about authorized payees and expired cards.\" get details, write them down. if possible, get documents. then go to a bank or financial adviser you can trust and run those details by them to see what they have to say. even if there's no scam, if what he's trying to do is illegal (even if he doesn't realize it himself) then you want to know before you get involved. you say you're willing to deal with \"other issues\" separately, but keep in mind that, even if there's no external scam here, those \"other issues\" could include hefty fees, censures on your own account, or jail time. ask yourself: does it make sense that this relative has an account overseas? i don't have any overseas accounts, because i don't do business in other countries. is your relative a dual-citizen? does he travel a lot? what country is the overseas account in? how long has he had this account? what bank is it with? where the money is going is just as important as how it gets there (ie: through your account.) arguably more so. keep in mind that many scammers tell their marks not to share what's going on with anyone else. (because doing so increases the odds of someone telling them to snap out of it.) it's entirely possible he's being scammed himself and just not telling you the whole story because the 419er is telling him to keep it quiet. (check out that link for more details on common scams that your relative may be unwittingly part of, btw.) get as many details as possible about what he's doing and why. if he's communicating with anyone else regarding this transfer, find out who. if there are emails, ask his permission to read them and watch for anything suspicious (ie: people who can't spell their own name consistently, constant pressure to act quickly, etc.)", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "get a loan with low interest rate on small business", "role": "user" }, { "content": "i am going to assume your location is the us. from what i am seeing it is unlikely you will get a loan other than some government backed thing. you are a poor risk. at 7k/month, you have above average household income. the fact that all of your income \"is being washed off somewhere\" is a behavior problem, not a mathematical one. for example, why do you have a car payment? you should purchase a car for cash. failing that, given reasonable rent (1100), reasonable car payment (400), insurances (300), other expenses (1000), you should clear at least 4000 per month in cash flow. where is that money going? here tracking spending and budgeting is your friend. figure out the leaks in your budget and fix them. by cutting back, and perhaps working a second job or somehow earning more you could have a down payment for a home in as little as 10 months. that is not a very long time. similarly we can discuss the grocery store. had you prepared for this moment three years ago you could have bought the store for cash. this would have eliminated a bunch of risk and increase the likelihood of this venture's success. if you had started this one year ago, you could have gone in with a significant down payment. the bank would see this as a good risk if you wanted to borrow the remainder. instead the bank sees you as a person as a poor risk. you spend every dime you make without much concern for the future or possible negative events (by implication of your question). if you cannot handle the cash flows of regular employment well, how can you handle the cash flows of a grocery business? it is far more complex, and there is far less room for error. so how do you get a loan? i would start with learning on how to manage your personal finance well prior to delving into the world of business.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "if a stock doesn't pay dividends, then why is the stock worth anything?", "role": "user" }, { "content": "i haven't seen any of the other answers address this point – shares are (a form of) ownership of a company and thus they are an entitlement to the proceeds of the company, including proceeds from liquidation. imagine an (extreme, contrived) example whereby you own shares in a company that is explicitly intended to only exist for a finite and definite period, say to serve as the producers of a one-time event. consider a possible sequence of major events in this company's life: so why would the shares of this hypothetical company be worth anything? because the company itself is worth something, or rather the stuff that the company owns is worth something, even (or in my example, especially) in the event of its dissolution or liquidation. besides just the stuff that a company owns, why else would owning a portion of a company be a good idea, i.e. why would i pay for such a privilege? buying shares of a company is a good idea if you believe (and are correct) that a company will make larger profits or capture more value (e.g. buy and control more valuable stuff) than other people believe. if your beliefs don't significantly differ from others then (ideally) the price of the companies stock should reflect all of the future value that everyone expects it to have, tho that value is discounted based on time preference, i.e. how much more valuable a given amount of money or a given thing of value is today versus some time in the future. some notes on time preference: but apart from whether you should buy shares in a specific company, owning shares can still be valuable. not only are shares a claim on a company's current assets (in the event of liquidation) but they are also claims on all future assets of the company. so if a company is growing then the value of shares now should reflect the (discounted) future value of the company, not just the value of its assets today. if shares in a company pays dividends then the company gives you money for owning shares. you already understand why that's worth something. it's basically equivalent to an annuity, tho dividends are much more likely to stop or change whereas the whole point of an annuity is that it's a (sometimes) fixed amount paid at fixed intervals, i.e. reliable and dependable. as cqm points out in their answer, part of the value of stock shares, to those that own them, and especially to those considering buying them, is the expectation or belief that they can sell those shares for a greater price than what they paid for them – irrespective of the 'true value' of the stock shares. but even in a world where everyone (magically) had the same knowledge always, a significant component of a stock's value is independent of its value as a source of trading profit. as jesse barnum points out in their answer, part of the value of stocks that don't pay dividends relative to stocks that do is due to the (potential) differences in tax liabilities incurred between dividends and long-term capital gains. this however, is not the primary source of value of a stock share.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why do some companies offer 401k retirement plans?", "role": "user" }, { "content": "stated plainly... it's a benefit. companies are not required to offer you any compensation above paying you minimum wage. but benefits attract higher quality employees. i think a big part of it is that it is the norm. employees want it because of the tax benefits. employees expect it because almost all reputable companies of any significant size offer it. you could run a great company, but if you don't offer a 401k plan, you can scare away good potential employees. it would give a bad impression the same way that not offering health insurance would.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "do i make money in the stock market from other people losing money?", "role": "user" }, { "content": "in gambling, the house also takes a cut, so the total money in the game is shrinking by 2-10 percent. so if you gain $100, it's because other people lost $105, and you do this for dozens of plays, so it stacks up. the market owns companies who are trying to create economic value - take nothing and make it something. they usually succeed, and this adds to the total pot and makes all players richer regardless of trades. gambling is transactional, there's a \"pull\" or a \"roll\" or a \"hand\", and when it's over you must do new transactions to continue playing. investing parks your money indefinitely, you can be 30 years in a stock and that's one transaction. and given the long time, virtually all your gains will be new economic value created, at no one else's expense, i.e. nobody loses. now it's possible to trade in and out of stocks very rapidly, causing them to be transactional like gambling: the extreme example is day-trading. when you're not in a stock long enough for the company to create any value (paid in dividends or the market appreciating the value), then yes, for someone to gain, someone else must lose. and the house takes a cut (e.g. etrade's $10 trading fee in and out). in that case both players are trying to win, and one just had better info on average. another case is when the market drops. for instance right after brexit i dumped half my domestic stocks and bought euro index funds. i gambled euro stocks would rebound better than us stocks would continue to perform. obviously, others were counterbetting that american stocks will still grow more than euro will rebound. who won that gamble? certainly we will all do better long-term, but some of us will do better-er. and that's what it's all about.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how are various types of income taxed differently in the usa?", "role": "user" }, { "content": "long-term capital gains, which is often the main element of investment income for investors who are not high-frequency day traders, are taxed at a single rate that is often substantially below the marginal rate they would otherwise be taxed at, particularly for wealthy individuals. there are a few rationales behind this treatment; the two most common are that the government wants to encourage long-term investments (as opposed to short-term speculation), and that capital gains are a kind of double taxation (from one point of view) as they are coming from income that has already been taxed once before (as wage or ordinary income). the latter in particular is highly controversial, but this is one of the more divisive political issues in the taxation front - one party would eliminate the tax entirely, the other would eliminate the difference. for most individuals, the majority of their long-term capital gains are taxed at 15% up to almost half of a million dollars total agi, which is a fairly low rate - it's equivalent to the rate a taxpayer would pay on up to $37,000 in wage income (after deductions/exemptions/etc.). you can see from this table in wikipedia that it is much preferred to pay long-term capital gains rates when possible - at every point it's at least 10% lower than the tax rate for ordinary income. ordinary income includes wages and many other sources of income - basically, anything that is not long term capital gains. wage income is taxed at this rate, and also subject to some non-income-tax taxes (fica and medicare in particular); other sources of ordinary income are not subject to those taxes (including ira income). short term capital gains are generally included in this bucket. qualified dividends are treated similarly to long-term capital gains (as they are of a similar nature), and taxed accordingly. the \"net investment tax\" is basically applying the medicare tax to investment income for higher-income taxpayers ($125k single, $250k joint). it's on top of capital gains rates for them. it came about through the affordable care act, and is one of the first provisions likely to be repealed by the new congress (as it can be repealed through the budgeting provision). it seems likely that 2017 taxes will not contain this provision.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is stock trading legal for a student on f-1 visa doing cpt in usa?", "role": "user" }, { "content": "there are no legal reasons preventing you from trading as a f-1 visa holder, as noted in this money.se answer. per this article, here are the things you need to set up an account: what do i need to have for doing stock trading as f1 student ? typically, most of the stock brokerage firms require social security number (ssn) for stock trading. the reason is that, for your capital gains, it is required by irs for tax purposes. if you work on campus, then you would already get ssn as part of the job application process…typically, once you get the on-campus job or work authorization using cpt or opt , you use that offer letter and take all your current documents like passport, i-20, i-94 and apply for ssn at social security administration(ssa) office, check full details at ssa website . ssn is typically used to report job wages by employer for tax purposes or check eligibility of benefits to irs/government. i do not have ssn, can i still do stock trading as f1 student ? while many stock brokerage firms require ssn, you are not out of luck, if you do not have one…you will have to apply for an itin number ( individual taxpayer identification number ) and can use the same when applying for stock brokerage account. while some of the firms accept itin number, it totally depends on the stock brokering firm and you need to check with the one that you are interested in. the key thing is that you'll need either a ssn or itin to open a us-based brokerage account.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is cfd a viable option for long-term trading?", "role": "user" }, { "content": "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.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why does historical price data not go back all the way on google finance?", "role": "user" }, { "content": "google finance and yahoo finance have been transitioning their api (data interface) over the last 3 months. they are currently unreliable. if you're just interested in historical price data, i would recommend either quandl or tiingo (i am not affiliated with either, but i use them as data sources). both have the same historical data (open, close, high, low, dividends, etc.) on a daily closing for thousands of ticker symbols. each service requires you to register and get a unique token. for basic historical data, there is no charge. i've been using both for many months and the data quality has been excellent and api (at least for python) is very easy! if you have an inclination for python software development, you can read about the drama with google and yahoo finance at the pandas-datareader group at https://github.com/pydata/pandas-datareader.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how can one go short in uber?", "role": "user" }, { "content": "the answer to this question is related to another question: how would i invest in uber? given that uber is a privately-held company, the average investor cannot directly buy stock. however, there are some indirect methods that you can use to invest in uber, and as a result, it is also possible to indirectly short uber. one method is to invest in (or short) companies that invest in uber. alphabet/google (goog) owns some, as well as microsoft (msft), toyota (adr), and other companies. theoretically, you could short these companies, as a hit to uber would be bad for those companies. another method would be to look at uber's competitors. think about what companies would do well if uber went under. lyft, perhaps, although it is so similar to uber that if one has trouble, the other may as well. perhaps instead you might invest in a traditional taxi company, or a company that provides services to taxi companies, such as medallion financial corporation (mfin). keep in mind that either investing or shorting any of these is not really the same as investing/shorting uber. it provides you some exposure in uber, but your investment is also affected by many other things that have nothing to do with uber. for more information, see the investopedia article ways to invest in uber before it goes public. for the record, i don't recommend that you do any of this.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what are the basics of apartment rental finances?", "role": "user" }, { "content": "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.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why should we expect stocks to go up in the long term?", "role": "user" }, { "content": "i feel something needs to be addressed the last 100 years have been a period of economic prosperity for the us, so it's no surprise that stocks have done so well, but is economic prosperity required for such stock growth? two world wars. the great depression. the dotcom bust. the telecom bust. the cold war. vietnam, korea. opec's oil cartel. the savings and loans crisis. stagflation. the great recession. i could go on. while i don't fully endorse this view, i find it convincing: if the usa has managed 7% growth through all those disasters, is it really preposterous to think it may continue?", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how to approach building credit without a credit card", "role": "user" }, { "content": "one possible route is to try to have no credit. this is different than bad credit. if you build up a good downpayment (20%), a number of banks would do manual underwriting for you.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how much can i withdraw from betterment and be considered long-term investment?", "role": "user" }, { "content": "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.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "car financed at 24.90% what can i do?", "role": "user" }, { "content": "you could look into refinancing with a bank or credit union. but to weed out options quickly, use a service like lendingtree, which can vet multiple options for you a whole lot more quickly than you could probably do yourself. (i don't work for, or get any benefit from lendingtree.) whatever you do, try to do all the applying within a short span of time, as to not negatively affect your credit score (read here) by creating extraneous inquiries. then again, if your credit sucks, you might not qualify for a re-fi. if you are turned down, make your payments on time for six months or so, and try again.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "first time investor and online brokerage accounts", "role": "user" }, { "content": "littleadv has given you excellent general advice, but to my mind, the most important part of it all and the path which i will strongly recommend you follow, is the suggestion to look into a mutual fund. i would add even more strongly, go to a mutual fund company directly and make an investment with them directly instead of making the investment through a brokerage account. pick an index fund with low expenses, e.g. there are s&p 500 index funds available with expenses that are a fraction of 1%. (however, many also require minimum investments on the order of $2500 or $3000 except for ira accounts). at this time, your goal should be to reduce expenses as much as possible because expenses, whether they be in brokerage fees which may be directly visible to you or mutual fund expenses which are invisible to you, are what will eat away at your return far more than the difference between the returns of various investments.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "shared groceries expenses between roommates to be divided as per specific consumption ratio and attendance", "role": "user" }, { "content": "i asked how often grocery purchases are made in a comment, but i'm going to assume weekly for simplicity. if a roommate is present during the week following a grocery purchase, then they owe a share according to their preferences as you outlined them above. you will have to track the grocery cost by category for that week and calculate the balance owed by the person for that week. if there is a partial week where most expect to leave for a holiday or otherwise, then fewer groceries should be purchased for that week, and the cost of shares will decrease accordingly. one need only indicate preferences once, and weekly attendance thereafter. the only issue remaining is to determine how to record shares. if a normal person consumes 3 shares of milk, and .5 shares of butter, and so on, you simply add up all of the milk shares for the week and divide the milk bill by those shares. same with the butter. the downside of this method is that you have to predict consumption in advance, so you may instead calculate by consumption after the fact with a deposit paid by all to create the initial grocery supply which will be refunded when that person leaves the grocery purchase co-op, and shares are calculated by who participated in the week prior to the grocery purchase. this also allows for a mid-week refresh if any commodity incurs higher than expected consumption, with the mid-week bill being added to the end of week refresh trip.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how to determine whether 1099-misc income is from self-employment?", "role": "user" }, { "content": "these kinds of questions can be rather tricky. i've struggled with this sort of thing in the past when i had income from a hobby, and i wanted to ensure that it was indeed \"hobby income\" and i didn't need to call it \"self-employment\". here are a few resources from the irs: there's a lot of overlap among these resources, of course. here's the relevant portion of publication 535, which i think is reasonable guidance on how the irs looks at things: in determining whether you are carrying on an activity for profit, several factors are taken into account. no one factor alone is decisive. among the factors to consider are whether: most of the guidance looks to be centered around what one would need to do to convince the irs that an activity actually is a business, because then one can deduct the \"business expenses\", even if that brings the total \"business income\" negative (and i'm guessing that's a fraud problem the irs needs to deal with more often). there's not nearly as much about how to convince the irs that an activity isn't a business and thus can be thrown into \"other income\" instead of needing to pay self-employment tax. presumably the same principles should apply going either way, though. if after reading through the information they provide, you decide in good faith that your activity is really just \"other income\" and not \"a business you're in on the side\", i would find it likely that the irs would agree with you if they ever questioned you on it and you provided your reasoning, assuming your reasoning is reasonable. (though it's always possible that reasonable people could end up disagreeing on some things even given the same set of facts.) just keep good records about what you did and why, and don't get too panicked about it once you've done your due diligence. just file based on all the information you know.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why can i see/trade vix but not s&p/tsx 60 vix?", "role": "user" }, { "content": "s&p/tsx 60 vix (cad) is an equation and as the implied volatility of two close to the money tsx 60 options change, the output changes. this is why the intra-day price fluctuates on a graph like a traded product. although vixc can't be traded, it can still be used as an important signal for traders. the excerpt is from slide 12, more information can be found here. https://www.m-x.ca/f_publications_en/vixc_presentation_en.pdf futures (stage 2) options, etfs, otc products (stage 3) have not been implemented.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why are currency forwards needed?", "role": "user" }, { "content": "can't i achieve the exact same effect and outcome by exchanging currency now and put that amount of usd in a bank account to gain some interest, then make the payment from one year from now? sure, assuming that the company has the money now. more commonly they don't have that cash now, but will earn it over the time period (presumably in euros) and will make the large payment at some point in time. using a forward protects them from fluctuations in the exchange rate between now and then; otherwise they'd have to stow away usd over the year (which still exposes them to exchange rate fluctuations).", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "gbp savings, what to do with them if leaving the u.k. in about 2 years time?", "role": "user" }, { "content": "key point here is to remember that gbp isnt falling a lot, it has fallen a lot already. if you havent liquidated your position in pounds by now at a higher rate i would personally not bother switching to another currency right now. the pound is near its 10 year low(nearing 2008 capital 'c' crisis levels) and despite what fear mongers may short the market for, the sun will shine after brexit as well. britain has a solid economy and that hasnt fundamentally changed, so even if the pound hasnt seen the absolute periodic lowest point yet(which may still come as brexit talks become more prevalent/near their end), it will eventually pull back up. in essence, you have more to lose acting in panic now than waiting to exchange for a better than today's rate at some point until the eventual brexit(probably in march 2019) or at any point afterwards(if you wont be needing those savings when you move).", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what are the risks & rewards of being a self-employed independent contractor / consultant vs. being a permanent employee?", "role": "user" }, { "content": "in the current economy there is no upside to working for yourself. get in a salaried position as soon as you can, and sacrifice to whatever gods you worship that you don't get made redundant. if you're already working for yourself, and wouldn't give it up for anything, hire someone, and get them off the street.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "i'm 20 and starting to build up for my mortgage downpayment, where should i put my money for optimal growth?", "role": "user" }, { "content": "the big question is whether you will be flexible about when you'll get that house. the overall best investment (in terms of yielding a good risk/return ratio and requiring little effort) is a broad index fund (mutual or etf), especially if you're contributing continuously and thereby take advantage of cost averaging. but the downside is that you have some volatility: during an economic downturn, your investment may be worth only half of what it's worth when the economy is booming. and of course it's very bad to have that happening just when you want to get your house. then again, chances are that house prices will also go down in such times. if you want to avoid ever having to see the value of your investment go down, then you're pretty much stuck with things like your high-interest savings account (which sounds like a very good fit for your requirements.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "where to start with personal finance?", "role": "user" }, { "content": "my reading list for someone just getting into personal finance would include the following i know it's a bunch but i'm trying to cover a few specific things. yeah it's a bit of reading, but lets face it, nobody is going to care as much about your money as you do, and at the very least this kind of knowledge can help fend off a 'shark attack' by someone trying to sell you something not because it's best for you, but because it earns them a fat commission check. once you've covered those, you have a good foundation, and oh lord there's so many other good books that you could read to help understand more about money, markets etc.. personally i'd say hit this list, and just about anything on it, is worth your time to read. i've used publishers websites where i could find them, and amazon otherwise.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "where can i find information on corporate bonds (especially those rated as junk) ?", "role": "user" }, { "content": "bond information is much tougher to get. try to find access to a bloomberg terminal. maybe you have a broker that can do the research for you, maybe your local university has one in their business school, maybe you know someone that works for a bank/financial institution or some other type of news outlet. part of the reason for the difference in ease of access to information is that bond markets are dominated by institutional investors. a $100 million bond issues might be 90% owned by 10-20 investors (banks, insurance co's, mutual funds, etc.) that will hold the bonds to maturity and the bonds might trade a few times a month/year. on the other hand a similar equity offering may have several hundred or thousand owners with daily trading, especially if it's included in an active stock index. that being said, you can get some information on fidelity's website if you have an account, but i think their junk data is limited. good luck with the hunt.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what's the appropriate way to signify an s-corp?", "role": "user" }, { "content": "subchapter s corporations are a special type of corporation; the difference is how they are taxed, not how they relate to their vendors or customers. as a result, they are named the same way as any other corporation. the rules on names of corporations vary by state. \"corporation\" and \"incorporated\" (and their abbreviations) are allowed by every state, but some states allow other names as well. the wikipedia article \"types of business entity\" lists an overview of corporation naming rules for each state. the s-corp that i work for has \"inc.\" at the end of its name.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what is the most effective saving money method?", "role": "user" }, { "content": "first pay yourself. when you get salary, send some parts of that (for example 10%) to your saving account. step by step you'll save nice money ;)", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "received a late 1099 misc for income i reported already, do i have to amend?", "role": "user" }, { "content": "why would the irs be coming after you if you reported the income? if you reported everything, then the irs will use the 1099 to cross-check, see that everything is in order, be happy and done with it. the lady was supposed to give you the 1099 by the end of january, and she may be penalized by the irs for being late, but as long as you/wifey reported all the income - you're fine. it was supposed to be reported on schedule c or as miscellaneous income on line 21 (schedule c sounds more suitable as it seems that your wifey is in a cleaning business). but there's no difference in how you report whether you got 1099 or not, so if you reported - you should be fine.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "when you're really young and have about 2k to start investing $ for retirement, why do some people advise you to go risky?", "role": "user" }, { "content": "why it is good to be risky the reason why it is good to be risky is because risky investments can result in higher returns on your money. the problem with being risky, is there is a chance you can lose money. however, in the long term you can usually benefit from higher returns even if you have a few slip ups. let me show you an example: these two lines are based off of placing $2,000 in a retirement fund at age of 20 and then at age of 25 start investing $6,500 a year (based off of a salary of $65,000 with a company that will 1 to 1 match up to 5% ira contribution, presumably someone with a master's should be able to get this) and then being able to increase your contribution amount by $150 a year as your salary begins to increase as well. the blue line assumes that all of this money that you are putting in a retirement account has a fixed 3% interest (compounded yearly for simplicity sake) every year until you retire. the red line is earning a 12% interest rate while you are 20 years old and then decreasing by 0.5% per year until you retire. since this is using more risky investments when you are younger, i have even gone ahead and included losing 20% of your money when you are 24, another 20% when you are 29, and then again another 20% when you are 34. as you can see, even with losing 20% of your money 3 different times, you still end up with more money then you would have had if you stuck with a more conservative investment plan. if i change this to 50% each 3 times, you will still come out about equal to a more conservative investment. now, i do have these 3 loses placed at a younger age when there is less to lose, but this is to be expected since you are being more risky when you are young. when you are closer to retirement you have less of a chance of losing money since you will be investing more conservatively. why it is ok to be risky when you are young but not old lets say you loose 20% of your $2,000 when you are young, you have 30-40 years to make that back. that's roughly $1 a month extra that you are having to come up with. so, if you have a risky investment go bad when you are young, you have plenty of time to account for it before you retire. now lets say you have $1,000,000 when you are 5 years from retiring and loose 20% of it, you have to come up with an extra $3,333 a month if you want to retire on time. so, if you have a risky investment go bad when you are close to retiring, you will most likely have to work for many more years just to be able to recover from your loses. what to invest in this is a little bit more difficult question to answer. if there was one \"right\" way to invest your money, every one would be doing that one \"right\" way and would result in it not turning out to be that good of investment. what you need to do is come up with a plan for yourself. my biggest advice that i can give is to be careful with fees. some places will charge a fixed dollar amount per trade, while others might charge a fixed dollar amount per month, while even others might charge a percentage of your investment. with only having $2,000 to invest, a large fee might make it difficult to make money.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what happens to public shareholders when a public stock goes private?", "role": "user" }, { "content": "i can see two possibilities. either a deal is struck that someone (the company itself, or a large owner) buys out the remaining shares. this is the scenario @mbhunter is talking about, so i won't go too deeply into it, but it simply means that you get money in your bank account for the shares in question the same as if you were to sell them for that price (in turn possibly triggering tax effects, etc.). i imagine that this is by far the most common approach. the other possibility is that the stock is simply de-listed from a public stock exchange, and not re-listed elsewhere. in this case, you will still have the stock, and it will represent the same thing (a portion of the company), but you will lose out on most of the \"market\" part of \"stock market\". that is, the shares will still represent a monetary value, you will have the same right to a portion of the company's profits as you do now, etc., but you will not have the benefit of the market setting a price per share so current valuation will be harder. should you wish to buy or sell stock, you will have to find someone yourself who is interested in striking a deal with you at a price point that you feel comfortable with.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "about dividend percentage", "role": "user" }, { "content": "dividend prices are per share, so the amount that you get for a dividend is determined by the number of shares that you own and the amount of the dividend per share. that's all. people like to look at dividend yield because it lets them compare different investments; that's done by dividing the dividend by the value of the stock, however determined. that's the percentage that the question mentions. a dividend of $1 per share when the share price is $10 gives a 10% dividend yield. a dividend of $2 per share when the share price is $40 gives a 5% dividend yield. if you're choosing an investment, the dividend yield gives you more information than the amount of the dividend.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "do i need a business credit card?", "role": "user" }, { "content": "it can certainly help build a credit score, but remember that businesses gain credit differently from individuals. depending on the country, there isn't usually a national register of business credit ratings the way there is for individuals. the credit record you'd be gaining is with your own bank only. banks will usually base your business credit record on revenue and transactional loads rather than merely on having and holding a credit card. that said, it isn't always that easy to get a business credit card and so it is a useful thing to have for credibility with clients (depending on the type of work you do). a credit card can also sometimes work out cheaper (and faster) for financing small overdrafts than a regular business overdraft facility. that said, i've found that larger loans over a five-year term can work out much cheaper for an established business than they would for an individual, even where the business itself has no history of using credit.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how does gst on paypal payments work for australian taxation?", "role": "user" }, { "content": "regardless of wether or not you are registered for gst, you are legally required to include a gst total on every invoice sent to an australian customer. this gst total must be 10% of the payment amount if you are registered for gst, or it must be $0.00 if you are not registered for gst. since all gst transactions with the government are in australian dollars, this amount on the invoice also needs to be in aud, or else it's impossible for you and your customer to both be working off the same gst amount. this means you need to transfer your money from usd to aud in paypal's \"manage currencies\" area before you can send a tax invoice to the customer, so that you can provide the correct amount in aud based on the actual exchange rate for the day (and you are required to send invoices promptly). alternatively, you can collect payments in aud using paypal or use a different payment service that collects payments in usd but immediately converts them to aud for sending an invoice (australian paypal competitors often provide this service).", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how does the dow jones industrial average (djia) divisor change to account for dividends?", "role": "user" }, { "content": "scrip dividends are similar to stock splits. with a stock split, 100 shares can turn into 200 shares; with scrip dividends they might turn into 105 shares.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "must etf companies match an investor's amount invested in an etf?", "role": "user" }, { "content": "the point here is actually about banks, or is in reference to banks. they expect you know how a savings account at a bank works, but not mutual funds, and so are trying to dispel an erroneous notion that you might have -- that the cbic will insure your investment in the fund. banks work by taking in deposits and lending that money out via mortgages. the mortgages can last up to 30 years, but the deposits are \"on demand\". which means you can pull your money out at any time. see the problem? they're maintaining a fiction that that money is there, safe and sound in the bank vault, ready to be returned whenever you want it, when in fact it's been loaned out. and can't be called back quickly, either. they know only a little bit of that money will be \"demanded\" by depositors at any given time, so they keep a percentage called a \"reserve\" to satisfy that, er, demand. the rest, again, is loaned out. gone. and usually that works out just fine. except sometimes it doesn't, when people get scared they might not get their money back, and they all go to the bank at the same time to demand their on-demand deposits back. this is called a \"run on the bank\", and when that happens, the bank \"fails\". 'cause it ain't got the money. what's failing, in fact, is the fiction that your money is there whenever you want it. and that's really bad, because when that happens to you at your bank, your friends the customers of other banks start worrying about their money, and run on their banks, which fail, which cause more people to worry and try to get their cash out, lather, rinse repeat, until the whole economy crashes. see -- the great depression. so, various governments introduced \"deposit insurance\", where the government will step in with the cash, so when you panic and pull all your money out of the bank, you can go home happy, cash in hand, and don't freak all your friends out. therefore, the fear that your money might not really be there is assuaged, and it doesn't spread like a mental contagion. everyone can comfortably go back to believing the fiction, and the economy goes back to merrily chugging along. meanwhile, with mutual funds & etfs, everyone understands the money you put in them is invested and not sitting in a gigantic vault, and so there's no need for government insurance to maintain the fiction. and that's the point they're trying to make. poorly, i might add, where their wording is concerned.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is it irresponsible for me to lease a $300/month car for 18 months?", "role": "user" }, { "content": "with a gross income of $ 95,000 per year, and a net savings rate of over $ 18,000 per year, a budget of $ 3,600 per year for automobile interest and depreciation is not irresponsible. but poor car choices, poor car maintenance habits, and driving habits that risk totalling cars are irresponsible. also, not fully understanding a lease deal is irresponsible. the \"great lease deal\" might be encouraging you to make a different \"poor car choice\" than you made last time. a \"great deal\" on a bad car is not really a great deal. also, depending on the contract and your driving habits, you might have a surprising cost at the end of the lease.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what are the advantages and disadvantages of leasing out a property or part of a property (such as a basement apartment)?", "role": "user" }, { "content": "complexity has mentioned some good points. i'd also like to add on the downsides: it's not that easy to get rid of a tenant! imagine if your tenant passed your background check with flying colors but then turned out to be the tenant from hell... how would you resolve the situation? if the thought of that kind of situation stresses you (it would stress me!), i would consider carefully whether you really want to be a landlord.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "it is worth using a discount stock broker? i heard they might not get the best price on a trade?", "role": "user" }, { "content": "always use limit orders never market orders. period. do that and you will always pay what you said you would when the transaction goes through. whichever broker you use is not going to \"negotiate\" for the best price on your trade if you choose a market order. their job is to fill that order so they will always buy it for more than market and sell it for less to ensure the order goes through. it is not even a factor when choosing between tradeking and scottrade. i use trade king and my friend uses scotttrade. besides the transaction fee (tk is a few $$ cheaper), the only other things to consider are the tools and research (and customer service if you need it) that each site offers. i went with tk and the lower transaction fee since tools and research can be had from other sources. i basically only use it when i want to make a trade since i don't find the tools particularly useful and i never take an analyst's opinion of a stock at face value anyway since everybody always has their own agenda.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why can't 401(k) statements be delivered electronically?", "role": "user" }, { "content": "there are a lot of unintended consequences of fairly arbitrary irs guidelines when it comes to 401ks, they both close and create tons of loopholes and many companies are left to implement their own policy around these laws. ultimately what you are left with are a lot of random things, interpreted differently by every single company in the country, that aren't directly codified by the irs or congress. if you have a choice regarding what brokerage firm manages your 401(k), then just call around. be sure to ask the pencil pusher on the phone to double check because they might say \"of course you can get paperless statements it is 2015\" but then when you sign up it becomes \"ooohhh sorry due to recent guidelines this kind of account isn't eligible for paperless statements\"", "role": "assistant" } ]