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265874 | "A 'indexed guaranteed income certificate' (Market Growth GIC) fits the criteria defined in the OP. The ""guaranteed"" part of the name means that, if the market falls, your capital is guaranteed (they cover the loss and return all your capital to you); and the ""index linked"" or ""market growth"" means that instead of the ROI being fixed/determined when you buy the GIC, the ROI depends on (is linked to) the market growth, e.g. an index (so you get a fraction of profit, which you share with the fund manager). The upside is that you can't 'lose' (lose capital). The fund manager doesn't just share the losses with you, they take/cover all the losses. The downside is that you only make a fraction of whatever profit you might make by investing directly in the market (e.g. in an index fund). Another caveat is that you buy a GIC over some fixed term, e.g. you have to give them you money for a year or more, two years." |
266194 | "If you want a Do-It-Yourself solution, look to a Vanguard account with their total market index funds. There's a lot of research that's been done recently in the financial independence community. Basically, there's not many money managers who can outperform the market index (either S&P 500 or a total market index). Actually, no mutual funds have been identified that outperform the market, after fees, consistently. So there's not much sense in paying someone to earn you less than a low fee index fund could do. And some of the numbers show that you can actually lose value on your 401k due to high fees. That's where Vanguard comes in. They offer some of the lowest fees (if not the lowest) and a selection of index funds that will let you balance your portfolio the way you want. Whether you want to go 100% total stock market index fund or a balance between total stock market index fund and total bond index fund, or a ""lazy 3 fund portfolio"", Vanguard gives you the tools to do it yourself. Rebalancing would require about an hour every quarter. (Or time span you declare yourself). jlcollinsnh A Simple Path to Wealth is my favorite blog about financial independence. Also, Warren Buffet recommended that the trustees for his wife's inheritance when he passes invest her trust in one investment. Vanguard's S&P500 index fund. The same fund he chose in a 10 year $1M bet vs. hedge fund managers. (proceeds go to charity). That was about 9 years ago. So far, Buffet's S&P500 is beating the hedge funds. Investopedia Article" |
266239 | If you need the money in the short-term, you want to invest in something fairly safe. These include saving accounts, CDs, and money market funds from someplace like Vanguard. The last two might give you a slightly better return than the local branch of a national bank. |
266480 | We struck a deal. I sold an asset to some body on june 1 . However he says, he would pay me any time on or before august 1st . This puts me in a dilemma. What if price goes down by august 1st and i would have to accept lower payment from him.? If price goes up till august 1st, then obviously i make money since ,even though item is sold,price is yet to be fixed between parties. However i know anytime on or before august 1st, i would get paid the price quoted on that particular day. This price could be high in my favor, or low against me. And, this uncertainty is causing me sleepless nights. i went to futures market exchange. My item (sugar,gold,wheat,shares etc..anything). i short sell a futures which just happens to be equivalent to the quantity of my amount i sold to the acquirer of my item. I shorted at $ 100 , with expiry on august 1st. Now fast orward and august 1st comes. price is $ 120 quoted . lets Get paid from the guy who was supposed to pay on or before august 1st. He pays 120 $. his bad luck, he should have paid us 100 $ on june 1st instead of waiting for august 1st . His judgement of price movement faulted. WE earned 20 $ extra than we expected to earn on june 1st (100$) . However the futures short of 100$ is now 120$ and you must exit your position by purchasing it at back. sell at 100$ and buy at 120$ = loss of 20$ . Thus 20 $ gained from selling item is forwarded to exchange . Thus we had hedged our position on june 1st and exit the hedge by august 1st. i hope this helps |
266567 | Let me offer an anecdote to this - I started helping a woman, widowed, retired, who had been paying $500/yr to get her taxes done. As I mentioned in my comment here, she got a checklist each year and provided the info requested. From where I sat, it seemed a clerk entered the info into tax software. As part of the transition to me helping her, I asked the prior guy (very nice guy, really) for a quick consult. She took the standard deduction, but also showed a nice annual donation. Didn't take advantage of the QCD, donate directly from an IRA (she was over 70-1/2) to save on the tax of this sum. That could have saved her $500. She was in the 15% bracket, with some room left for a Roth conversion. Converting just enough to 'fill' that bracket each year seemed a decent strategy as it would avoid the 25% rate as her RMDs rose each year and would push her to 25%. To both items the guy suggested that this was not his area, he was not a financial planner. Yes, I understand different expertise. With how simple her return was, I didn't understand the value he added. If you go with a professional, be sure you have an understanding of what he will and won't do for you. |
266783 | For the period 1950 to 2009, if you adjust the S&P 500 for inflation and account for dividends, the average annual return comes out to exactly 7.0%. Source. Currently inflation is around 2%. So your 2% APY is a 0% real return where the stock market return is 7%. I.e. on average, stocks have a return that is higher by 7. If you mix in bonds, 70% stocks to 30% bonds, your real returns will drop to around 5.5%, but you are safer in individual years (bonds often have good years when stocks have bad years). We're making a bit of a false dichotomy here. We're talking about returns on stocks in retirement accounts versus returns on CDs in regular accounts. You can buy stocks in regular accounts and it is legally possible to have a CD in a retirement account. So you can get bankruptcy protection and tax advantages with a CD. |
266785 | "You said your strategy was to put it into a index fund. But then you asked about setting stock limits. I'm confused. Funds usually trade at their price at the end of the day, so you shouldn't try to time this at all. Just place your order. If you are buying ETFs, there is going to be so much volume on the market that your small trade is going to have no impact on the price. You should just place a market order. A market order is an order to buy or sell a stock at the current market price. A limit order is an order to buy or sell a security at a specific price. In the US, when you place a trade with any broker, you can either place a limit order or a market order. A market order just fills your order with the next best sellers in line. If you place an order for 100 shares, the sellers willing to sell 100 shares at the lowest price will be matched with your order (sometimes you may get 50 shares at one price and 50 shares at a slightly different price). If your stock has a lot of volatility and you place a market order for a small amount of shares, you will get the best price. If you place a limit order, you specify the price at which you want to buy shares. Your order will then only be filled with sellers willing to sell at that price or lower (i.e. they must be at least as good as you specified). This means you could place an order at a limit that does not get filled (the stock could move in a direction away from your limit price). If you really want to own the stock, you shouldn't use a limit order. You shouldn't only use a limit order if you want to tell your broker ""I will only buy this stock at this price or better."" p.s. Every day that passes is NOT a waste. It's just a day that you've decided investing in cash is safer than investing in the market." |
266900 | "The margin money you put up to fund a short position ($6000 in the example given) is simply a ""good faith"" deposit that is required by the broker in order to show that you are acting in good faith and fully intend to meet any potential losses that may occur. This margin is normally called initial margin. It is not an accounting item, meaning it is not debited from you cash account. Rather, the broker simply segregates these funds so that you may not use them to fund other trading. When you settle your position these funds are released from segregation. In addition, there is a second type of margin, called variation margin, which must be maintained while holding a short position. The variation margin is simply the running profit or loss being incurred on the short position. In you example, if you sold 200 shares at $20 and the price went to $21, then your variation margin would be a debit of $200, while if the price went to $19, the variation margin would be a credit of $200. The variation margin will be netted with the initial margin to give the total margin requirement ($6000 in this example). Margin requirements are computed at the close of business on each trading day. If you are showing a loss of $200 on the variation margin, then you will be required to put up an additional $200 of margin money in order to maintain the $6000 margin requirement - ($6000 - $200 = $5800, so you must add $200 to maintain $6000). If you are showing a profit of $200, then $200 will be released from segregation - ($6000 + $200 = $6200, so $200 will be release from segregation leaving $6000 as required). When you settle your short position by buying back the shares, the margin monies will be release from segregation and the ledger postings to you cash account will be made according to whether you have made a profit or a loss. So if you made a loss of $200 on the trade, then your account will be debited for $200 plus any applicable commissions. If you made a profit of $200 on the trade then your account will be credited with $200 and debited with any applicable commissions." |
267067 | In the US this is considered a sale, and the proceeds will be taxed as if you've sold the stocks in any other way. The decision about the treatment (capital, ordinary, etc) is dependent on what kind of stock that is, how you acquired it, how long have you held it, etc. If it is a regular stock that you bought as an investment and held it for more than a year - then it will likely to be a capital gain treatment. However, this is only relevant for the US taxation. Since you're a UK person, you should also check how it is handled in the UK, which may or may not be different. |
267070 | "Seems like you could shoehorn this into an investment account. You make purchases similar to what you would make in a money market account ($1 per share) via your premium payments. You see appreciation in those shares. You incur expenses on your ""purchases"" via cost of insurance and possibly monthly payment fees." |
267627 | Yes, and there are several ways, the safest is a high-yield savings account which will return about 1% yearly, so $35 per month. That's not extremely much, but better than nothing (you probably get almost zero interest on a regular checking account). |
267740 | "Been a long while since I've read it but if I remember correctly with quotational loss Graham refers to an unjustified decline in stock price because of Mr. Market's fear and loathing where the business prospects of the company are actually still sound. This is opposed to ""actual"" loss of capital which he would consider to be a company going bankrupt or just more generally turning out to have way worse business prospects than expected with the justified decline in stock price that entails." |
267818 | "Yes, but the rates at which they're borrowing make all the difference. Japan's central bank is borrowing at about 2 percent on a 30 year bond, and Greece is borrowing at 18 percent. Japan would thus be paying 4.6% of GDP on debt service for government borrowing, while Greece would thus be paying 27% (assuming that all current bonds could be converted to current rates). [Japan](http://www.bloomberg.com/markets/rates-bonds/government-bonds/japan/), [Greece](http://www.ecb.int/stats/money/long/html/index.en.html). Further, as many other commenters have noted, Japan retains the ability to print money and thus inflate their debt away, while Greece relies on the European Central Bank, which would not hyperinflate the entire Eurozone to help out Greece's government. As a comparison, the US is currently paying 1.3% of its GDP on government debt service. (My calculations are amateur. Please correct me if I'm wrong.) As [Dean Baker notes](http://www.cepr.net/index.php/blogs/cepr-blog/the-devasting-interest-burden-of-the-debt): ""It is important to remember that most of the people in Washington debates on economic policy do not know much economics. They tend not to be very good at arithmetic either. That is why they were blindsided by the collapse of the $8 trillion housing bubble that wrecked the economy. As we get endless pontification about the crushing debt burden it is worth touching base with reality on occasion. In that spirit, CEPR brings you the latest data and projections on the ratio of the federal government's interest payments to GDP, courtesy of the Congressional Budget Office (CBO). [T]he interest to GDP ratio is currently at a crushing 1.3 percent, near the post World War II low. However this figure overstates the burden somewhat. Last year the Federal Reserve Board refunded almost $80 billion to the Treasury. This was interest earned on government bonds and other assets it now holds. That leaves a net interest burden of 0.8 percent of GDP, by far the lowest of the post World War II era."" **TL;DR**: what matters is not total size of debt alone, but also borrowing costs and ability to inflate the debt away. Japan is paying very little on its large debt; Greece is paying a lot. **TL;DR TL;DR**: I'd like to borrow a few trillion dollars at 2%, too." |
268026 | "If you sign the check ""For Deposit Only"", the bank will put it in your account. You may need to set up a ""payable name"" on the account matching your DBA alias. However, having counted offerings for a church on several occasions, I know that banks simply have no choice but to be lax about the ""Pay to the Order Of"" line on checks. Say the church's ""legal name"" for which the operating funds account was opened is ""Saint Barnabas Episcopal Church of Red Bluff"". You'll get offering checks made out to ""Saint Barnabas"", ""Saint B's"", ""Episcopal Church of Red Bluff"", ""Red Bluff Episcopal"", ""Youth Group Fund"", ""Pastor Frank"", etc. The bank will take em all; just gotta stamp em with the endorsement for the church. Sometimes the money will be ""earmarked"" based on the payable line; any attempt to pay the pastor directly will go into his ""discretionary fund"", and anything payable to a specific subgroup of the church will go into their asset account line, but really all the cash goes directly to the same bank account anyway. For-profit operations are similar; an apartment complex may get checks payable to the apartment name, the management company name, even the landlord. I expect that your freelance work will be no different." |
268069 | Generally, prize money is miscellaneous income, reported on line 21 of your 1040 and not subject to self employment tax. See IRS publication 525 for more details; under 'Prizes and Awards', they give an example of winning a photography contest. Now, there are a couple of exceptions. If your main occupation is participating in contests such as this - or you do it sufficiently that it could be considered such - then it may be considered something you should pay self employment taxes on. If it's your first one - you're fine. Also, it would have to be something that doesn't look like work for me to be confident it's self employment income. I'm not sure that winning the Netflix prize for improving on their algorithm by 10% wouldn't run the risk of being considered sort of employment. I'm not a tax advisor, but in that case I would hire one to be sure. I could imagine companies abusing 'prizes' otherwise to get out of paying employment taxes... |
268261 | At this point the cost of borrowing money is very low. For the sake of argument, say it is 1% per year for a large institution. I can either go out and find a client to invest 100,000$ and split profit and loss with them. Or, I could borrow 50,000$, pay 500$/year in interest, and get the same return and loss, while moving the market half as much (which would let me double my position!) In both cases the company is responsible for covering all fixed costs, like paying for traders, trades, office space, branding, management, regulatory compliance, etc. For your system to work, the cost to gather clients and interact with them has to be significantly less than 1% of the capital they provide you per year. At the 50% level, that might actually be worth it for the company in question. Except at the 50% level you'd have really horrible returns even when the market went up. So suppose a more reasonable level is the client keeps 75% of the returns (which compares to existing companies which offer larger investors an 80% cut on profits, but no coverage on losses). Now the cost to gather and interact with clients has to be lower than 2500$ per million dollars provided to beat out a simple loan arrangement. A single sales employee with 100% overhead (office, all marketing, support, benefits) earning 40,000$/year has to bring in 32 million dollar-years worth of investment every year to break even. Cash is cheap. Investment houses sell cash management, and charge for it. They don't sell shared investment risk (at least not to retail investors), because it would take a lot of cash for it to be worth their bother. More explicitly, for this to be viable, they'd basically have to constantly arrange large hedges against the market going down to cover any losses. That is the kind of thing that some margin loans may require. That would all by itself lower their profits significantly, and they would be exposed to counter-party risk on top of that. It is much harder to come up with a pile of cash when the markets go down significantly. If you are large enough to be worthwhile, finding a safe counterparty may be nearly impossible. |
268330 | That's technically true but there will still be a max level they can hit before the signal clips. Part of why commercials are so jarring is because they are heavily compressed (eliminating those peaks and valleys and basically making the entire commercial blare at just below the max volume) vs a movie or tv show that would use more dynamic range of volume levels. |
268553 | "When you invest in a property, you pay money to purchase the property. You didn't have to spend the money on the property though - you could have invested it in the stock market instead, and expected to make a 4% annualized real rate of return or thereabouts. So if you want to know whether something's a ""good investment"", ask whether your annual net income will be more or less than 4% of the money you put into it, and whether it is more or less risky than the stock market, and try to judge accordingly. Predicting the net income, though, is a can of worms, doubly so when some of your expenses aren't dollar-denominated (e.g. the time you spend dealing with the property personally) and others need to be amortized over an unpredictable period of time (how long will that furnace repair really last?). Moreover your annualized capital gain and rental income is also unpredictable; rent increases in a given area cannot be expected to conform to a predetermined mathematical formula. Ultimately it is impossible to predict in the general case - if it were possible we probably would have skipped that last housing bubble, so no single simple formula exists." |
268653 | "Hence why keeping the capital gains tax rate down is not such a bad idea. Sure, it may benefit ""rich"" people, but it will also allow RESPONSIBLE low and middle class income families to reinvest their capital gains and accumulate more wealth." |
268731 | I like that you are hedging ONLY the Roth IRA - more than likely you will not touch that until retirement. Looking at fees, I noticed Vanguard Target retirement funds are .17% - 0.19% expense ratios, versus 0.04 - 0.14% for their Small/Mid/Large cap stocks. |
268989 | Pretty much. There is an executive trying decide between a trader who has made the firm millions in the past few years and a quant who costs him a 6 figure salary but doesn't pull in any revenue. Then on top of it the quant is talking mathematics which the executive doesn't even know in the first place. Who is executive going to side with? |
269129 | Unless you suffer from the illusion that you can time the market, it honestly doesn't matter much; the difference is lost in the noise. That may be true even if you do suffer from that illusion. Also, as discussed here previously, the drop in a stock's price right after the dividend has been paid just reflects the fact that you aren't about to get an immediate refund in the form of a dividend. If you look at the real cost per share, it's meaningless and can/should be ignored. Buying after the dividend is paid may save you a tiny fraction of a cent of short-term income tax, but that's meaningless in real terms. |
269385 | I think you understood much of what I say, in general. Unfortunately, I didn't follow Patches math. What I gleen from your summary is a 1% match to the 10% invested, but a .8% expense. The ETF VOO has a .05% annual fee, a bit better than SPY. A quick few calculations show that the 10% bonus does offset a long run of the .75% excess expense compared to external investing. After decades, the 401(k) appears to still be a bit ahead. Not the dramatic delta suggested in the prior answer, but enough to stay with the 401(k) in this situation. The tiny match still makes the difference. Edit - the question you linked to. The 401(k) had no match, and an awful 1.2% annual expense. This combination is deadly for the younger investor. Always an exception to offer - a 25% marginal rate earner close to retiring at 15%. The 401(k) deposit saves him 25, but can soon be withdrawn at 15, it's worth a a few years of that fee to make this happen. For the young person who is planning a quick exit from the company, same deal. |
269575 | Based on the additional comment you gave, I would recommend that you keep the capital from the businesses separate as much as possible. It sounds like you won't get into any trouble legally if you make 'loans' or transfers of capital from one business into the other. But I would suggest that you keep detailed records of any transfers that you do make. The reason why is that in any business, it is important to know the economics of how your business makes money. If you find yourself making transfers repeatedly, then your business model may be bad. Even if your transfers are only to deal with the cost of poor customers, it could still mean that your business model needs to be adjusted. But if it's a question of the timing of cash flows, then there's really nothing wrong with taking some of the money from your successful pants operation and building up more working capital in your stationery shop. |
269656 | Are these estimates? I didn't see a link or source in there to actual financial statements. As a private company I'm not sure that information is public. A quick Google search didn't bring anything to light. Regardless, I'd be much more interested in seeing Spotify's cash flow statement. For startup companies that can be much more indicative of health. |
269727 | In terms of operations, banks are indifferent to inflation. Short rates except right before a recession or near-recession are always lower than long rates, regardless of inflation level, assuming no quotas or price controls. Banks produce credit by borrowing short to lend long, so as long as short rates are lower than long rates, they can be expected to produce loans, again assuming no quotas or price controls. In short, from the banks' perspective, inflation does not affect their desire to produce credit. |
269943 | Assuming here that you're talking about deducting your tuition as a below the line deduction as a business expense or similar, then it depends. Per 1.162-5, if the education: Then it qualifies as a legitimate business expense and is deductible. If not - if you're going to school for a different career, such as someone employed as a waiter but going to school to get a degree in nursing, or someone employed as a teacher getting a law degree - then it's not; you'd have to qualify under one of the other (simpler, but lesser) credits. Read more on this topic at Tax topic 513. Note that the other most commonly applicable deduction - the above the line Tuition and Fees deduction - expired in 2016 and is not applicable (yet?) in 2017, and further would not require most of what you describe as it only counts tuition and fees paid directly to the institution and required as a condition of attendance, so books, parking, etc. don't count. |
269969 | > Which is why you'll essentially never find anybody running less than $10m, and usually more than that. 1) You have to get started somewhere. 2) If you're already trading your own account, why not spend 5k or so to start a hedge fund and earn additional money managing other people's money too? 3) It seems to me you are only looking at normal hedge funds and not considering the thousands of micro sized hedge funds which largely go un-reported on. Even those do indeed typically start with 500k-5 mil, but to suggest that I can't start one with 100-150k is simply nonsense. I did, and anyone else can too if they go through the proper paperwork (management LLC, fund LP, memorandum of offering written up, etc), and get the proper NASD licensing. BTW, now that I think about it more, I think mine was 150k, not 100k. Never-the-less, it was certainly one of the smallest ever. |
269987 | "As cryptocurrencies are rather new compared to most assets, there hasn't been a lot of specific guidance for a lot of situation, but in 2014 the IRS announced that it published guidance in Notice 2014-21. I'm not aware of further guidance that has been published beyond that, though it wouldn't surprise me if treatments changed over time. In that notice, the answer to the first question describes the general treatment: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. Your specific questions (about what constitutes a ""business"", and when you're considered to be ""selling"" the cryptoproperty) are likely to be considered on a case by case basis by the IRS. As the amounts involved here are so small (relatively speaking), my recommendation would be to read through what the IRS has published carefully, make reasonable assumptions about what scenarios that are described are closest to what you're doing, and document doing so clearly as part of your tax preparations. And when in doubt, erring on the side of whichever option incurs more tax is unlikely to be objected to by them. Of course, I'm not a lawyer or tax advisor, I'm a stranger on the Internet, so for ""real"" advice you should contact somebody qualified. I doubt you'd be faulted too much for not doing so given the amounts involved. You could also attempt contacting a local IRS office or calling them with your specific questions, and they may be able to provide more specific guidance tailored to you, though doing so may not save you from an auditor deciding something differently if they were to examine your return later. There are also phone numbers to contact specific people listed at the end of Notice 2014-21; you could try calling them as well." |
270221 | "There are no risk-free high-liquidity instruments that pay a significant amount of interest. There are some money-market accounts around that pay 1%-2%, but they often have minimum balance or transaction limits. Even if you could get 3%, on a $4K balance that would be $120 per year, or $10 per month. You can do much better than that by just going to $tarbucks two less times per month (or whatever you can cut from your expenses) and putting that into the savings account. Or work a few extra hours and increase your income. I appreciate the desire to ""maximize"" the return on your money, but in reality increasing income and reducing expenses have a much greater impact until you build up significant savings and are able to absorb more risk. Emergency funds should be highly liquid and risk-free, so traditional investments aren't appropriate vehicles for them." |
270426 | Self employment is. Freelancing is the same thing as owning a shop on mainstreet. Many small businesses are operated by a single person. It occurs to me now there are probably people who differentiate between business ownership and freelancing because they want to diminish the achievements of freelancers. Those people are wrong and should be looked out for. What are your motives? /u/spitinthecola |
270642 | A routing number and account number are on the bottom of every check. If anybody who ever handled your checks or even saw your checks could just withdraw as much money as they wanted, the whole banking system would need to be reworked. In short, just having that info is not enough. Not legally. |
270952 | My grandmother passed away earlier this year. When I got my car 3 years ago, I did not have good enough credit to do it on my own or have her as a co-signer. We had arranged so that my grandmother was buying the car and I was co-signing. A similar situation was happening and I went to my bank and took out a re-finance loan prior to her passing. I explained to them that my grandmother was sick and on her death bed. They never once requested a power of attorney or required her signature. I am now the sole owner of the vehicle. |
270983 | we're grateful that you took the time to read the newest post made by my friend matt perry nguyen in buildingbusinesscreditblog.com. we hope you can also post your comments and suggestions on this piece. in behalf of my friend and fellow poster a million thanks! |
271048 | "There are two ways you can ""cash in."" 1) Buy enough additional shares to bring your share total to 100, then exercise the put. 2) Sell the put in the open market for a profit." |
271243 | "Have the stock certificate in with a letter from the previous owner of the company from what I can tell in the letter these stocks were distributed from the owner himself stating ""after evaluation we have determined that your investment in this company is worth 10,000 shares at $1.00 a piece"" as well as I believe these shares were also acquired when the company was going through name changes or their company was bought" |
271395 | You are both right and wrong. A few key things - I'm not charging the government body I work for, it's a free implementation - I ensured I do all the work on my own time, not company time. I live somewhere where most government employees work multiple jobs, so this isn't uncommon. In fact, my government body actually does often hire contractors who are also employed. - I don't live in the US, things are somewhat less different where I am. - It is certainly not illegal, and I would even argue that it is even somewhat ethical. My work saved my employer (the tax payer) a significant amount of money, which is a net positive. The service is of high quality, and I did not break any employment agreements or laws in the process. - I hired a lawyer to double check everything. |
271525 | "First, pay off the highest interest first. If you have 80%, pay it first. Paying off a card/loan with a lower rate, but a lower payment or a lower balance can help your mental capacity by having fewer things to pay. But, this should be a decision where things are similar, such as 20-25%, not 20-80%. What about any actual loans? Any loans with a fixed payment and a fixed amount? If you must continue to use CC while paying them off, use the one with the lowest interest rate. Call all of your debtors and ask for reduction in interest rate. This is not the option to take first... This is a strategic possibility and will cause credit score issues... If you are considering bankruptcy or not paying back some, then you have even more negotiation power. Consider calling them all and telling them that you only have a little bit of money and would like to negotiate a settlement with them. ""I have only a limited amount of money, and lots of debt. I will pay back whomever gives me the best deal."" See what they say. They may not negotiate until you stop paying them for a few months... It is not uncommon to get them to reduce interest (even to 0%) and/or take a reduction in the amount due - up to 25 cents on the dollar. To do this, you might need to pay the amount all at once, so look into loans from sources like retirement, home equity, life insurance, family... Also, cut out all expenses. Cut them hard; cut until it hurts. Cut out the cell phone (get a pre-paid plan and/or budget $10-20/month), cut out all things like alcohol, tobacco, firearms, lottery, tattoos, cable tv, steak, eating out. Some people would suggest that you consider pets and finding them a new home. No games, no trips, no movies, no new clothes... Cut out soft drinks, candy, and junk food. Take precautions to stay healthy - don't wear shoes in the house, brush your teeth, take a multi vitamin, get exercise, eat healthy (this is not expensive, organic stuff, just regular groceries). Consider other ways to save, like moving in with family or friends. Having family or friends live with you and pay rent. Analyze costs like daycare vs. job income. Apply for assistance - there are lots of levels, and some don't rely on others, such as daycare. Consider making more money - new job, 2nd job, overtime, new career. Consider commute - walk, bike, take the bus. Work 4/10's. Telework. Make a list of every expense and prioritize them. Only keep things which are really necessary. Good Luck." |
271691 | "That characterisation of arbitrage-free pricing sounds a bit like the ""relative vs. fundamental"" approaches to asset pricing that Cochrane outlines (in his text, *Asset Pricing*). Rebonato also makes this distinction with regard to term structure models in *Volatility and Correlation*. On one extreme you have CAPM-style models in which asset prices are completely determined by investors' risk preferences; on the other extreme, you would have something like a SABR-Libor Market Model where you take everything up to and including the volatility surface as given. What's interesting to me is the way in which these different classes of models get used in various parts of the financial industry. So, buy side firms tend to rely a lot more on equilibrium-style models, since they ultimately care about things like how the equity risk premium or the bond risk premium affect asset prices. In contrast, derivatives quants working at a big sell-side bank who are pricing exotics don't care about what the ""fundamental"" value of their underlying assets is; they just take that as given and price the exotic accordingly." |
271825 | One of the things to consider is that most Vanguard funds are very tax efficient, that is they don't throw off much in the way of cap gains or taxable dividends while they grow. So if you do it right you won't have to pay much in the way of taxes on your investments even if they are in taxable accounts until retirement when at the very least you will have a lot more flexibility in managing your money and very likely be in a lower tax bracket. Roth is better if you are planning other types of investments, but if you are planning to hold an efficient Vanguard fund the difference isn't that bit. |
272174 | For a time period as short as a matter of months, commercial paper or bonds about to mature are the highest returning investments, as defined by Benjamin Graham: An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative. There are no well-known methods that can be applied to cryptocurrencies or forex for such short time periods to promise safety of principal. The problem is that with $1,500, it will be impossible to buy any worthy credit directly and hold to maturity; besides, the need for liquidity eats up the return, risk-adjusted. The only alternative is a bond ETF which has a high probability of getting crushed as interest rates continue to rise, so that fails the above criteria. The only alternative for investment now is a short term deposit with a bank. For speculation, anything goes... The best strategy is to take the money and continue to build up a financial structure: saving for risk-adjusted and time-discounted future annual cash flows. After the average unemployment cycle is funded, approximately six or so years, then long-term investments should be accumulated, internationally diversified equities. |
272279 | What options do I have? Realistically? Get a regular full time job. Work at it for a year or so and then see about buying a house. That said, I recently purchased a decent home. I am self-employed and my income is highly erratic. Due to how my clients pay me, my business might go a couple months with absolutely no deposits. However, I've been at this for quite a few years. So, even though my business income is erratic, I pay myself regularly once a month. In order to close the deal with the mortgage company I had to provide 5 years worth of statements on my business AND my personal bank accounts. Also I had about a 30% down payment. This gave the bank enough info to realize that I could absolutely make the payments and we closed the deal. I'd say that if you have little to no actual financial history, don't have a solid personal income and don't have much of a down payment then you probably have no business buying a house at this point. The first time something goes wrong (water heater, ac, etc) you'll be in a world of trouble. |
272318 | Those are the expected yields; they are not guaranteed. This was actually the bread and butter of Graham Newman, mispriced bonds. Graham's writings in the Buffett recommended edition of Securities Analysis are invaluable to bond valuation. The highest yielder now is a private subsidiary of Société Générale. A lack of financial statements availability and the fact that this is the US derivatives markets subsidiary are probably the cause of the higher rates. The cost is about a million USD to buy them. The rest will be similar cases, but Graham's approach could find a diamond; however, bonds are big ticket items, so one should expect to pay many hundreds of thousands of USD per trade. |
272328 | It's never too early, but age 3 is when we started a piggy bank. Age 4 is when we opened a bank account. When you go shopping with your children, discuss what items cost (such as bread, milk, books, etc.) Start teaching them that everything has a value...then relate it to how much they have saved. Kids need to learn 3 basic things from their parents: how to save/invest, how to spend wisely, how to share/donate |
272425 | I'm assuming you're in the United States for this. I highly recommend getting a CPA to help you navigate the tax implications. Likely, you'll pay taxes as a sole proprietor, on top of any other income you made. Hopefully you kept good records because you'll be essentially paying for the profits, but you'll need to show the revenue and expenditures that you had. If you have any capital expenditures you may be able ton amortize them. But again, definitely hire a professional to help you, it will be well worth the cost. |
272520 | "All investors have ultimately the same investment goal: maximize returns while limiting risk to an acceptable level. Of course we would love to maximize returns while minimizing risk, but in most cases if you want higher returns you must be willing to accept higher levels of risk. We must keep in mind that investors are humans, not computers. As such not everybody is willing to accept the same level of risk. Insurance is simply a way to ""buy down"" risk. Yes, it reduces our overall gains (most of the time), but so do bonds vs stocks (most of the time). And yet who among us doesn't have bonds in our portfolio? Insurance is yet another way to balance risk and return." |
272559 | Definitely! BitCoin could also alleviate some of the concern that people might have about their identity/payment details being used to track their browsing habits. If your payment method is anonymous, and you can register with a pseudonym, you can read all the twilight fan-fic you want! |
272693 | He would spend it into the economy that is accepting his dollars. As an example, the apple maker might borrow $100 with $10 interest for the deer shank, then later on get the $100 back from the deer hunter in trade for 150 apples, and then pay this $100 to the banker. Now the apple maker still needs $10 to pay off his loan. The banker says he'll trade his $10 in interest profit for 15 apples, now the apple maker can resolve his debt without further borrowing. The difference between spending interest earnings and issuing a loan is that when the banker is spending, they are getting something for their own use, when they are issuing the loan, they aren't getting anything but the promise to repay that loan. |
272807 | While you can print that on the check, it isn't considered legally binding. If you are concerned about a check not being deposited in a timely manner, consider purchasing a cashier's check instead. This doesn't solve the problem per se, but it transfers responsibility of tracking that check from you to the bank. |
272820 | "In the UK, I could start my own business - either as a self-employed person, or by starting a company. With a company, the company might have £50,000 income, £5,000 cost, and pay me a £45,000 salary. In that case the company has no profit and pays no taxes, but I personally pay income tax. Or I could pay myself any salary I like, say £20,000 salary, so I pay tax on £25,000 profit and £20,000 salary. The state actually gets less money in total if I set my salary so the company makes a profit. If I'm self employed, income minus cost is my profit and I pay taxes on that. If I don't make profit, I pay no tax. Unfortunately, I also wouldn't have any money to buy food, pay the rent, and so on and so on. I'd have the same income and pay the same taxes as someone who is unemployed. There are ""businesses"" that are just run for the enjoyment of the owner and don't make profit. Rich guy buys a farm and starts breeding race horses, that kind of thing. In that case, there is zero difference between a guy breeding race horses and calling it a ""business"" and another guy breeding race horses and calling it a hobby. Neither makes money and neither pays taxes." |
272840 | Without making specific recommendations, it is worthwhile to point out the differing tax treatments for a Roth IRA: investments in a Roth IRA will not be taxed when you withdraw them during retirement (unless they change the law on that or something crazy). So if you are thinking about investing in some areas with high risk and high potential reward (e.g. emerging market stocks) then the Roth IRA might be the place to do it. That way, if the investment works out, you have more money in the account that won't ever be taxed. We can talk about the possible risks of certain kinds of investments, but this is not an appropriate forum to recommend for or against them specifically. Healthcare stocks are subject to political risk in the current regulatory climate. BRICs are subject to political risks regarding the political and business climate in the relevant nations, and the growth of their economies need not correspond with growth in the companies you hold in your portfolio. Energy stocks are subject to the world economic climate and demand for oil, unless you're talking alternative-energy stocks, which are subject to political risk regarding their subsidies and technological risk regarding whether or not their technologies pan out. It is worth pointing out that any ETF you invest in will have a prospectus, and that prospectus will contain a section discussing the risks which could affect your investment. Read it before investing! :) |
272940 | "You are pushing your luck, but not because you're not in the US, because it is likely that you're not qualified. From what you said, I doubt you can take it (I'm not a professional though, get a professional opinion). You say ""dedicated space"". It has to be an exclusive room. You cannot deduct 10 sq. ft. from your living room because your computer that is used wholly for your business is there. It has to be a room that is used exclusively for your business, and for your business only. I.e.: nothing not related to the business is there, and when you're there the only thing you do is working on your business. Your office doesn't have to be in the US necessarily, to the best of my knowledge. Your office must be in your home. If you take primary residence exclusion as part of your FEI, then I doubt you can deduct as well." |
273142 | "I would think that a lot of brokers would put the restriction suggested in @homer150mw in place or something more restrictive, so that's the first line of answer. If you did get assigned on your short option, then (I think) the T+3 settlement rules would matter for you. Basically you have 3 days to deliver. You'll get a note from your broker demanding that you provide the stock and probably threatening to liquidate assets in your account to cover their costs if you don't comply. If you still have the long-leg of the calendar spread then you can obtain the stock by exercising your long call, or, if you have sufficient funds available, you can just buy the stock and keep your long call. (If you're planning to exercise the long call to cover the position, then you need to check with your broker to see how quickly the stock so-obtained will get credited to your account since it also has some settlement timeline. It's possible that you may not be able to get the stock quickly enough, especially if you act on day 3.) Note that this is why you must buy the call with the far date. It is your ""insurance"" against a big move against you and getting assigned on your short call at a price that you cannot cover. With the IRA, you have some additional concerns over regular cash account - Namely you cannot freely contribute new cash any time that you want. That means that you have to have some coherent strategy in place here that ensures you can cover your obligations no matter what scenario unfolds. Usually brokers put additional restrictions on trades within IRAs just for this reason. Finally, in the cash account and assuming that you are assigned on your short call, you could potentially could get hit with a good faith, cash liquidation, or free riding violation when your short call is assigned, depending on how you deliver the stock and other things that you're doing in the same account. There are other questions on that on this site and lots of information online. The rules aren't super-simple, so I won't try to reproduce them here. Some related questions to those rules: An external reference also on potential violations in a cash account: https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations" |
273433 | A CFA is plus all over the world but it probably won't be as useful as in the US. You can take the exams in many countries though so if you start in the US you should be able to continue back home. Better look online to see what your options are. CFA is not perfect for all types of finance careers though so before you start make sure it makes sense for you. |
273472 | "Edit: This is false. Seritage has no listed properties in Canada [on their website](http://www.seritage.com/properties) And ""Fast Eddie"" will make even more bank by renting out the space occupied by his old hobby project through Seritage, after neglecting the space his hobby project was in since his purchase during his stock buybacks." |
273565 | Try to find out (online) what 'the experts' think about your stock. Normally, there are some that advise you to sell, some to hold and some to buy. Hold on to your stock when most advise you to buy, otherwise, just sell it and get it over with. A stock's estimated value depends on a lot of things, the worst of these are human emotions... People buy with the crowd and sell on panic. Not something you should want to do. The 'real' value of a stock depends on assets, cash-flow, backlog, benefits, dividends, etc. Also, their competitors, the market position they have, etc. So, once you have an estimate of how much the stock is 'worth', then you can buy or sell according to the market value. Beware of putting all your eggs in one basket. Look at what happened to Arthur Andersen, Lehman Brothers, Parmalat, Worldcom, Enron, etc. |
273567 | Sample Numbers: Owe $100k on house. House (after 'crash') valued at: $50K. Reason for consternation: What rational person pays $100k for property that is only worth half that amount? True Story: My neighbor paid almost $250K (a quarter-of-a-million dollars - think about that..) for a house that when he walked (ran!) away from it was sold by the bank for $88K. Unless he declares bankruptcy (and forgoes all his other assets, including retirement savings) he still owes the bank the difference. And even with bankruptcy, he may still owe the bank - this should cause anyone to be a bit concerned about being up-side down in a mortgage loan. |
273645 | "In the UK there is a non-profit called the Citizen's Advice Bureau which provides free advice to people on a wide range of subjects, but including debt and budgeting. Consumer Credit Counselling Service provides explicit help but again, in the UK. A search for ""volunteer debt counsellor"" reveals a whole host of organizations that do that, but almost all based in the UK or Canada or Australia. The US seems not to be well provided with such organizations. This page advises people to volunteer as a debt counsellor, but gives no specifics of organizations, just ""Volunteer at local county community centers, churches and agencies. Your local faith-based organization might be a good place to start, even if you are not a member. Regrettably a search for ""free debt counselling"" produced a similar list of non-profits in UK and Canada, but mainly companies peddling consolidation loans in the US." |
273761 | "As you note, your question is inherently opinion-based. That said, if I were in your situation I would sell the stock all at once and buy whatever it is you want to buy (hopefully some index ETF or mutual fund). According to what I see, the current value of the HD stock is about $8500 and the JNJ stock is worth less than $500. With a total investment of less than $10,000, any gain you are likely to miss by liquidating now is not going to be huge in absolute terms. This is doubly true since you were given the stock, so you have no specific reason to believe it will do well at all. If you had picked it yourself based on careful analysis, it could be worth keeping if you ""believed in yourself"" (or even if you just wanted to test your acumen), but as it is the stock is essentially random. Even if you want to pursue an aggressive allocation, it doesn't make sense to allocate everything to one stock for no reason. If you were going to put everything in one stock, you'd want it to be a stock you had analyzed and picked. (I still think it would be a bad idea, but at least it would be a more defensible idea.) So I would say the risk of your lopsided allocation (just two companies, with more than 90% of the value in just one) outweighs any risk of missing out on a gain. If news breaks tomorrow that the CEO of Home Depot has been embezzling (or if Trump decides to go on the Twitter warpath for some reason), your investment could disappear. Another common way to think about it is: if you had $9000 today to buy stocks with, would you buy $8500 worth of HD and $500 worth of JNJ? If not, it probably doesn't make sense to hold them just because you happen to have them. The only potential exception to my advice above would be tax considerations. You didn't mention what your basis in the stock is. Looking at historical prices, it looks like if all the stock was 20 years old you'd have a gain of about $8000, and if all of it was 10 years old you'd have a gain of about $6000. If your tax situation is such that selling all the stock at once would push you into a higher tax bracket, it might make sense to sell only enough to fit into your current bracket, and sell the rest next year. However, I think this situation is unlikely because: A) since the stock has been held for a long time, most of the gains will be at the lower long-term rate; B) if you have solid income, you can probably afford the tax; and C) if you don't have solid income, your long-term capital gains rate will likely be zero." |
273820 | Your Purchase and Sale agreement should have a financing contingency. If it doesn't, your money may be at risk, and the agent did you no favor. Edit - I answered when away from computer. This is a snapshot of the standard clause from the Greater Boston Real Estate Board. Each state has its own standard documents. The normal process is to have some level of prequalification, showing a high probability of final approval, make offer, then after it's accepted, this form is part of the purchase and sale process. |
273947 | "Exactly what accounts are affected by any given transaction is not a fixed thing. Just for example, in a simple accounting system you might have one account for ""stock on hand"". In a more complex system you might have this broken out into many accounts for different types of stock, stock in different locations, etc. So I can only suggest example specific accounts. But account type -- asset, liability, capital (or ""equity""), income, expense -- should be universal. Debit and credit rules should be universal. 1: Sold product on account: You say it cost you $500 to produce. You don't say the selling price, but let's say it's, oh, $700. Credit (decrease) Asset ""Stock on hand"" by $500. Debit (increase) Asset ""Accounts receivable"" by $700. Credit (increase) Income ""Sales"" by $700. Debit (increase) Expense ""Cost of goods sold"" by $500. 2: $1000 spent on wedding party by friend I'm not sure how your friend's expenses affect your accounts. Are you asking how he would record this expense? Did you pay it for him? Are you expecting him to pay you back? Did he pay with cash, check, a credit card, bought on credit? I just don't know what's happening here. But just for example, if you're asking how your friend would record this in his own records, and if he paid by check: Credit (decrease) Asset ""checking account"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. If he paid with a credit card: Credit (increase) Liability ""credit card"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. When he pays off the credit card: Debit (decrease) Liability ""credit card"" by $1000. Credit (decrease) Asset ""cash"" by $1000. (Or more realistically, there are other expenses on the credit card and the amount would be higher.) 3: Issue $3000 in stock to partner company I'm a little shakier on this, I haven't worked with the stock side of accounting. But here's my best stab: Well, did you get anything in return? Like did they pay you for the stock? I wouldn't think you would just give someone stock as a present. If they paid you cash for the stock: Debit (increase) Asset ""cash"". Credit (decrease) Capital ""shareholder equity"". Anyone else want to chime in on that one, I'm a little shaky there. Here, let me give you the general rules. My boss years ago described it to me this way: You only need to know three things to understand double-entry accounting: 1: There are five types of accounts: Assets: anything you have that has value, like cash, buildings, equipment, and merchandise. Includes things you may not actually have in your hands but that are rightly yours, like money people owe you but haven't yet paid. Liabilities: Anything you owe to someone else. Debts, merchandise paid for but not yet delivered, and taxes due. Capital (some call it ""capital"", others call it ""equity""): The difference between Assets and Liabilities. The owners investment in the company, retained earnings, etc. Income: Money coming in, the biggest being sales. Expenses: Money going out, like salaries to employees, cost of purchasing merchandise for resale, rent, electric bill, taxes, etc. Okay, that's a big ""one thing"". 2: Every transaction must update two or more accounts. Each update is either a ""debit"" or a ""credit"". The total of the debits must equal the total of the credits. 3: A dollar bill in your pocket is a debit. With a little thought (okay, sometimes a lot of thought) you can figure out everything else from there." |
273960 | Let the man be. If you've tried again and again to convince him, and haven't, maybe he doesn't want to be convinced. It's his money, and he has every right to manage it as he sees fit. You can advise him, but its his call whether he accepts your advice or not, and for what reasons. And suppose you push and push and it gets through? Now either he has more money than he would otherwise, and he's happy he has such a smart friend. Or he loses 30% of his money, and you're trying to tell him that he's going to earn it back in due time, but you can't, because he's not talking to you. Ever. What do you think is the mean benefit to your friendship? |
274306 | Here's another answer on the topic: Saving for retirement: How much is enough? An angle on it this question made me think of: a good approach here is to focus on savings rate (which you can control) rather than the final number (which you can't, plus it will fluctuate with the markets and make you nervous). For example, focus on saving at least 10% of your income annually (15% is much safer). If you focus on the final number: The way it works in the real world is that you save as much as you can, but there are lots of random factors and unknowns. Some people end up having to work a lot longer than they hoped to. Others end up able to retire early. Others retire on time but have to spend less than they hoped. But the one thing you can often control (as long as you have an income and no catastrophes, anyway) is that you spend less than you make. |
274359 | The data provided in your question is irrelevant. The data that you provided in the comments (that you're physically present in the US while doing the work) is the only relevant information needed to answer your question. You will need to pay taxes in the US for the earnings. The company invoicing the US client will also need to pay taxes in the US for its earnings from these invoices. You can transfer between bank accounts and deposit whatever you want anywhere you want, no-one cares (with respect to the US taxes, check with Indian tax accountant about Indian requirements). |
274721 | If your business is a Sole Proprietorship and meets the criteria, then you would file form Schedule C. In this case you can deduct all eligible business expenses, regardless of how you pay for them (credit/debit/check/cash). The fact that it was paid for using a business credit card isn't relevant as long as it is a true business expense. The general rules apply: Yes - if you sustain a net loss, that will carry over to your personal tax return. Note: even though it isn't necessary to use a business credit card for business expenses, it's still an extremely good idea to do so, for a variety of reasons. |
274833 | Taking into account that you are in Cyprus, a Euro country, you should not invest in USD as the USA and China are starting a currency war that will benefit the Euro. Meaning, if you buy USD today, they will be worth less in a couple of months. As for the way of investing your money. Look at it like a boat race, starting on the 1st of January and ending on the 31st of December each year. There are a lot of boats in the water. Some are small, some are big, some are whole fleets. Your objective is to choose the fastest boat at any time. If you invest all of your money in one small boat, that might sink before the end of the year, you are putting yourself at risk. Say: Startup Capital. If you invest all of your money in a medium sized boat, you still run the risk of it sinking. Say: Stock market stock. If you invest all of your money in a supertanker, the risk of it sinking is smaller, and the probability of it ending first in the race is also smaller. Say: a stock of a multinational. A fleet is limited by it's slowest boat, but it will surely reach the shore. Say: a fund. Now investing money is time consuming, and you may not have the money to create your own portfolio (your own fleet). So a fund should be your choice. However, there are a lot of funds out there, and not all funds perform the same. Most funds are compared with their index. A 3 star Morningstar rated fund is performing on par with it's index for a time period. A 4 or 5 star rated fund is doing better than it's index. Most funds fluctuate between ratings. A 4 star rated fund can be mismanaged and in a number of months become a 2 star rated fund. Or the other way around. But it's not just luck. Depending on the money you have available, your best bet is to buy a number of star rated, managed funds. There are a lot of factors to keep into account. Currency is one. Geography, Sector... Don't buy for less than 1.000€ in one fund, and don't buy more than 10 funds. Stay away from Gold, unless you want to speculate (short term). Stay away from the USD (for now). And if you can prevent it, don't put all your eggs in one basket. |
274945 | Investors hungry for returns are piling back into securities once tarnished by the financial crisis. Complex structured investments developed a bad reputation during the credit crunch. Ten years later, investors seeking yield are overcoming their skepticism and buying into securities that rely on financial engineering to juice returns. Volumes of CLOs, or collateralized loan obligations, hit a record $247 billion in the first nine months of the year, according to data from J.P. Morgan Chase JPM 1.59%▲ & Co. Fueled by a wave of refinancings and nearly $100 billion in new deals, that far outpaces their recent full-year high of $151 billion in 2014 and the precrisis peak of $136 billion in 2006. The CLO boom is the latest sign of the ferocious hunt for yield permeating markets. Stellar performance over the past year has made CLOs increasingly hard to ignore for investors like insurance companies and pension funds. CLOs carve up a portfolio of bank loans to highly indebted companies into slices of securities with different levels of risk. The securities at the bottom of the CLO stack offer the highest potential source of returns, but they are also the first to absorb losses if there are defaults in the underlying loan portfolio. The more senior slices offer lower returns but are more insulated from losses. CLOs are often lumped together with other alphabet-soup acronyms of the financial crisis, such as more toxic CDOs, or collateralized debt obligations. But CLOs actually weathered the financial crisis well: Investors who bought at the top of the market in 2007 suffered paper losses, but there were no defaults at all for the highest-rated securities. That track record has helped boost CLOs’ appeal for investors with lingering concerns over scooping up more complex investments. . Taking off / Global CLO volumes “The demand for things like CLOs….is extraordinary,” said Rick Rieder, chief investment officer for global fixed income at BlackRock Inc. CLOs are one of the largest demand sources for the leveraged loan market, which has also been booming this year. Volumes of leveraged loans, often used by private-equity firms to fund buyouts, are on track to surpass their 2007 record, according to LCD, a unit of S&P Global Market Intelligence. At the same time, investors have voiced concerns about companies’ rising leverage level, and weaker creditor protections. Within a CLO are different risk profiles: Investors in the most senior, AAA-rated piece of debt get paid first and are the most insulated from losses if defaults rise in the underlying loan portfolio. They also receive the skinniest returns. Slices of debt further down receive higher returns, but will suffer losses if defaults spike. At the bottom sits the equity tranche, the first loss-absorber and last to get paid, but the highest potential source of returns. A 2014 report from Standard & Poor’s Ratings Services stated that AAA-rated and AA-rated CLO tranches incurred no losses at all between 1994 and 2013. Loss rates for lower-rated tranches, meanwhile, were low—just 1.1% for B-rated securities over that period. . Flying High / Market returns since J.P. Morgan recommended buying CLOs last July That doesn’t prevent some conservative investors from conflating the CLOs with the now-infamous CDOs, many of which were linked to subprime mortgages and spread and amplified losses in the U.S. housing market. One breed of CDOs are on a comeback path of their own, with more investors returning to them during an aging bull market. Many people were “burnt by these acronyms from the crisis,” said Zak Summerscale, head of credit fund management for Europe and Asia Pacific at Intermediate Capital Group . He is currently recommending that clients buy senior CLO tranches over investment-grade bonds. CLOs, like other types of securitizations, have been subject to greater regulation since the financial crisis. That includes forcing funds that manage a CLO to retain 5% of the securities, in an effort to align incentives with investors. That has “attracted additional capital into the market,” said Mike Rosenberg, a principal at alternative investment manager Tetragon. Assets under management in the “loan participation” sector—a proxy for funds that invest in CLOs—have grown 21% this year to $206 billion, according to Thomson Reuters Lipper. The pickup in CLOs has been a boon to banks weathering declines in trading revenues in the current low-volatility environment. Revenue from CLO-related activity at the top 12 global investment banks more than doubled over the first half of 2017 from a year earlier to almost $1 billion, according to financial consultancy Coalition. CLO investors have been handsomely rewarded in recent months. J.P. Morgan strategist Rishad Ahluwalia recommended clients buy CLOs last July as he thought they looked too cheap. Between then and the end of September, BB-rated CLO tranches returned 25.4%, compared with a 25.2% return for the technology-oriented Nasdaq stock index, according to his calculations. “CLOs have been an absolute home run,” said Mr. Ahluwalia, though he added such chunky returns aren’t repeatable. Analysts say CLOs got beaten down last year following a series of troubles in the underlying loan market, including distress in the energy sector. Some analysts think the strong rally in CLO tranches since then should give investors pause; others think the market has further to run. Renaud Champion, head of credit strategies at Paris-based hedge fund La Française Investment Solutions, likes AAA-rated CLO tranches but with a twist: leverage. Mr. Champion says he buys senior European CLO tranches and borrows money against them to increase the size of his position between five and 10 times. That can amplify gains—and losses—significantly. “The difference between now and a year ago is the availability of leverage,” he said. Bankers say only a small proportion of CLO buyers use leverage and emphasize that trades are subject to daily margin calls. That means investors have to post cash to cover mark-to-market losses on a position, which in turn limits how much they are willing to borrow. “The leverage in the system today is a fraction compared to precrisis,” said J.P. Morgan’s Mr. Ahluwalia. Write to Christopher Whittall at [email protected] Appeared in the October 23, 2017, print edition as 'Crisis-Era Securities Regain Investors’ Favor.' |
275171 | "I (and probably most considering trading) had a similar thought as you. I thought if I just skimmed the peaks and sold before the troughs, perhaps aided by computer, I'd be able to make a 2% here, 2% there, and that would add up quickly to a nice amount of money. It almost did seem ""foolproof"". Then I realized that sometimes a stock just slides...down...and there is no peak higher than what I bought it for. ""That's OK,"" I'd think, ""I'm sure it will recover and surpass the price I bought it for...so now I play the waiting game."" But then it continues sliding, and my $10k is now worth $7k. Do I sell? Did I build a stop loss point into my computer program? If so, what is the right place to put that stop? What if there is a freak dip down and it triggers the stop loss but THEN my stock recovers? I just lost $14,000 like this last week--luckily, only virtually! The point is, your idea only has half a chance to work when there is a mildly volatile stock that stays around some stable baseline, and even then it is not easy. And then you factor in fees as others mentioned... People do make money doing this (day traders), and some claim you can use technical analysis to time orders well, so if you want to try that, read about technical analysis on this site or elsewhere." |
275319 | I think it's fairly obvious that I'm talking about people that have recently graduated college that are 21-25 years old. If you need me to spell it out, plenty of people make 100k out of college after having graduated at the age of <25. |
275516 | I think the point is that m2 is 13.7 trillion usd, the Swiss investment is not even *half* a percent. The us equities marker valuation is larger at 22.5 trillion USD. Dumping an extra 100 bil usd is too little to do anything. Even dumping a trillion USD is a relatively small number. |
275543 | This doesn't sound very legal to me. Real estate losses cannot generally be deducted unless you have other real estate income. So the only case when this would work is when that person has bunch of other buildings that do produce income, and he reduces that income, for tax purposes, by deducting the expenses/depreciation/taxes for the buildings that do not. However, depreciation doesn't really reduce taxes, only defers them to the sale. As mhoran_psprep said - all the rest of the expenses will be minimal. |
275833 | I don't recommend Roth for those in the 25% bracket. If you are in the 25% bracket now, I'd suggest you go pretax and as you are planning to be in a lower bracket in a few years, use that bracket to convert. Depositing today at 25% to convert at 15% in a few years puts you that much ahead. I understand the allure of a Roth heavy strategy. And the fuzzy crystal ball for what the tax code will look like doesn't help. That said, a retiree today who is a few years too young for Social Security will see an Exemption + STD deduction of $10,000, and a 15% bracket ending at $36,250, so $46,250 total with a total tax bill of $4991. A retiree should target $250K-$500K pretax to stay flexible and not miss these low brackets in the future. |
275932 | "I think it's apt to remind that there's no shortcuts, if someone thinks about doing FX fx: - negative sum game (big spread or commissions) - chaos theory description is apt - hard to understand costs (options are insurance and for every trade there is equivalent option position - so unless you understand how those are priced, there's a good chance you're getting a ""sh1tty deal"" as that Goldman guy famously said) - averaging can help if timing is bad but you could be just getting deeper into the ""deal"" I just mentioned and giving a smarter counterparty your money could backfire as it's the ""ammo"" they can use to defend their position. This doesn't apply to your small hedge/trade? Well that's what I thought not long ago too! That's why I mentioned chaos theory. If you can find a party to hedge with that is not hedging with someone who eventually ends up hedging with JPM/Goldman/name any ""0 losing days a year"" ""bank"".. Then you may have a point. And contrary to what many may still think, all of the above applies to everything you can think of that has to do with money. All the billions with 0-losing days need to come from somewhere and it's definitely not coming just from couple FX punters." |
276009 | It's better to use the accounting equation concept: Asset + Expenses = Capital + Liabilities + Income If you purchase an asset: Suppose you purchased a laptop of $ 500, then its journal will be: If you sell the same Laptop for $ 500, then its entry will be: |
276189 | I guess you are from US? EDI solutions are starting to be standard in most EU countries. The invoices we get are through EDI solutions and we can automate most of them. We recently upgraded our invoice process solution and now we need one less AP position. |
276314 | Selling options is a great idea, but tweak it a bit and sell credit spreads on both sides of the market, i.e. sell OTM bear call spreads and OTM bull put spreads. This is also known as an iron condor, and limits risk, and allows for much more flexibility. |
276323 | The problem would not only be that of Kyle but also that of American Express. When Kyle pays by credit card, American Express pays the bills out of their pockets on his behalf and then forwards the bill to Kyle. The issuer of a credit card takes the risk that the holder of the card won't pay the credit card bill. In practice there are safeguards in place which prevent a company like AE to pay such huge sums in one day through an automated process. Credit card companies have sophisticated algorithms to determine unusual spending patterns and block any transactions which appear unusual. Also, after a few billions their bank will likely block them and prevent them from paying any more bills. But let's play along and pretend these safeguards wouldn't exist. That means after Kyle's spending spree, American Express will be trillions in debt, with their main debitor being a 10 year old boy who won't ever be able to pay. Kyle will have to declare personal bankruptcy. There are various variants of bakruptcy in the US, but they basically all boil down to him paying everything he can pay (not much considering that he is 10) and then defaulting on his debt. Afterwards he is debt-free. That means the debt is now that of American Express. American Express will not be able to pay that debt with their bank(s) either, so they will have to declare bankruptcy and default on their debt too. This domino effect passes the burden on to the banks which can not carry a trillion-level debt either. A bank going bankrupt is a serious issue because it means they can not pay back any of the money in the saving accounts hold by companies or private people with them. So the problem would return to those people Kyle wanted to help in the first place. Also, the collapse of one bank will often result in the collapse of further banks, resulting in a collapse spiral destroying the whole world-wide finance system. Nothing would be gained. |
276631 | I think you leave out the major problem of your partners in crime there. Chances are one of them will eventually slip up later in life, and at some point snitch on you in order to get out of trouble. This is particularly true if you would manage to acquire amounts in the 100k range per participant. The inside man would pose the greatest risk there. |
276839 | "By protected you mean what exactly? In the US, generally you'd get a promissory note signed by B saying ""B promises to repay A such and such amount on such and such terms"". In case of default you can sue in a court of law, and the promissory note will be the evidence for your case. In case of B declaring bankruptcy, you'd submit the promissory note to the bankruptcy court to get in line with all the other creditors. Similarly in all the rest of the world, you make a contract, you enforce the contract in courts." |
276906 | How often do you need to actually go to a bank? atm's, debit and credit cards work where ever. you can even deposit checks by taking a picture of them. dealing with cash would be more troublesome though. |
276955 | Reading the descriptions on Amazon.com it appears Investments is a graduate text and Elements of Investments is the undergraduate version of the text. |
277190 | Buying back shares is an indication that the company does not believe that there is justification to invest in production, employee training, or technology. In the end, what it mostly does is pump up the share price, which very directly pumps up the value of share-based compensation that the CEO has. On mergers and acquisitions, I don't have the time to look for the source right now, but I've read a few reports that showed that the vast majority of mergers and acquisitions actually erodes the value when compared to the two separate companies. They cite reasons like overblown expectations, clash in company cultures, and manipulations up top as a reason to do this. On paper, they all sound great, but these are very dificult things to operationalise which only the very best management teams manage to work out. The above parties are part of the real economy as long as they are companies that produce goods or services, which is often the case. It contrasts with the paper economy which is the world of bonds, hedge funds, share markets, and commodity markets. The money moving around in this world seldom makes a diference to anybody but the directly involved. The share market is a classic example of this. Although the value of stocks may be high, most people who own the stocks don't actually have more money to spend, unless, obviously they sell the shares. The value is on paper until it is transacted, and can collapse like a house of cards. The real economy is much more stable and resiliant, and has a large impact on the majority of the population. It won't vary hugely from one month to the next like the stock market can. I don't have any educaton in economics other than curiosity on how these things work. I read Krugman's blog and generally google any term or concept that tickles my fancy. I also partake in quite a few discussions here on reddit that frequently prompt me to go investiage some more. I don't proport to be some sort of expert, but I do have concise ideas of how things work, and have a very strong bias of looking at evidence and fact-based postulations rather than ideology. |
277208 | I would strongly suggest you select an answer: all the above two cover everything I can possibly recommend, but perhaps my perspective as a person who was exactly in your shoes a year ago might appeal to you more. My first bank was Chase, and they usually give out a free checking account to students that come with leaves of 100 checks. Unfortunately, I was 24 at that time, and the max possible age to qualify was 23 or 21. Paying $25 for any number of checks was a big deal for me as I had no job, and transportation and rent was costing me $1k/month anyways. I came here and asked questions: lots of them. MrChrister, God bless his soul, recommended credit unions to me. I never knew they existed. A year later, I am a proud member of 3 CUs: I recommend Alliant, DCU and SchoolsFirst: I am their member and very proud of it! |
277373 | You need a find a financial planner that will create a plan for you for a fixed fee. They will help you determine the best course of action taking into account the pension, the 403B, and any other sources of income you have, or will have. They will know how to address the risk that you have that that particular pension. They will help you determine how to invest your money to produce the type of retirement you want, while making sure you are likely to not outlive your portfolio. |
277491 | It's illegal and you can go to jail because it exploits the small companies and their investors who believe in the company. |
277548 | "Personally I would have a hard time ""locking up"" the money for that very little return. I would probably rather earn no interest in favor of the liquidity. However, you should find out what the early removal penalties are. If those are minimal and you are very confident that you will not need the money over the term period then its definitely better to earn something rather than nothing. If inflation is negative you aren't out as much not getting any interest as you would be normally. Consider that in 2014 US inflation was 0.8%. Online liquid savings accounts pay about 1%. so that's only .2% positive. In comparison at -.4% you are better off with no interest than a US person putting their money in a paying savings account. Keep in mind though that inflation can change month to month so just because June was negative doesn't mean the year will be that way. Not sure your ability to invest in the US market or what stable dividend payers may exist in Sweden.... You said you are risk averse, but it may be worth it to find a stable dividend paying fund. I like one called PFF, it pays a monthly dividend of 6% and over 5 years stock price is very stable. Of course this is quite a significant jump in risk because you can lose money if markets tank (PFF is down over 10 years quite a bit). Maybe splitting up the money and diversifying?" |
277583 | Good tax people are expensive. If you are comfortable with numbers and computers, you can do it better yourself. |
277810 | A self-directed IRA could be a good solution for you and all IRAs are qualified IRAs the administrator must allow for alternative assets. However, if you're looking to do the ROBS (Roll Over Business Start-up) system, there are not very many administrators that can facilitate that. There is also a checkbook IRA (aka single member LLC) that more administrators are able to work with, but the rules are different from a ROBS plan. Check with your financial adviser, CPA, tax guru and ask which method would work best for what you're looking to accomplish. |
277915 | First of all, it's pretty rare that would cash out your entire Traditional IRA at once when you retire. That would incur major taxes and negate much of the tax deductibility benefit. Instead, you'd want to take distributions of just what you want to live on, which are taxed at income rates, and let the rest continue to grow tax free until you need/want it. As to your main question, if you don't expect to be in a lower tax bracket in retirement, then yes, Roth makes sense. But this is a pretty major assumption. When you're working, your salary pushes you into higher tax brackets. Once you're retired, you don't have as many sources of income. It could be mostly distributions from retirement accounts, and even coming from a Traditional IRA a lot of that will be tax free or taxed at a low rate (e.g. 15%). If when it was earned it would have been taxed at a higher marginal rate (e.g. 25%), then the Traditional IRA was a better choice than the Roth. Traditional versus Roth, if both are options to you (with deductibility for the Traditional), all comes down to tax rate now versus what you expect your tax rate to be in retirement. There is no universal answer. |
277955 | So what, if anything, might this mean for those of us who still have those Countrywide mortgages? BTW, my subprime mortgage is awesome. We rode out a bad year where the price shot up to $4,000/month. Today it's way down and we're paying only 2.5%. |
278071 | "I strongly suggest you look at CreditKarma and see how each aspect of what you are doing impacts your score. Here's my take - There's an anti-credit approach that many have which, to me, is over the top. ""Zero cards, zero credit"" feels to me like one step shy of ""off the grid."" It's so far to the right that it actually is more of an effort than just playing the game a bit. You are depositing to the card frequently to do what you are doing. That takes time and effort. Why not just pay the bill in full each month, and just track purchases so you move the cash to the account in advance, whether that's physical or on paper? In your case, it's the same as charging one item every few months to keep the card active. If that's what you'd like to do, that's fine. I'd just avoid having the card take up too much of your time and thought. (Disclaimer - I've used and written about Credit Karma. I have no business relationship with them, my articles are to help readers, and not paid placement.) mhoran's response is in line with my thinking. His advice to use the card to build your score is what the zero-credit folk criticize as ""a great debt score."" Nonsense. If you use debt wisely, you'll never pay interest (except for a mortgage, perhaps) and you may gain rewards with no cost to you." |
278082 | That seems to indicate that you can in fact depreciate a vehicle given to you? Section 1015 discusses the calculation of basis for gifted property, it says nothing about depreciation. Personal property cannot be depreciated for tax purposes unless it is used for business purposes. So unless you drive your car as part of your sole-proprietor business, you cannot depreciate it, be it a gift or a car you purchased yourself. If you can depreciate the car, then sec. 1015 is used to calculate the basis for the depreciation. |
278102 | "I found the answer after some searching online. It turns out that when talking options, rarely is the current P/L line considered when talking about making adjustments/taking trades off. From Investopedia: http://www.investopedia.com/terms/b/breakevenpoint.asp ""... For options trading, the breakeven point is the market price that a stock must reach for an option buyer to avoid a loss if they exercise the option. For a call buyer, the breakeven point is the strike price plus the premium paid, while breakeven for a put position is the strike price minus the premium paid."" The first sentence sounds more like the current P/L line, but the bold section clearly states the rule I was looking for. In the example posted in my question above, the breakpoints labeled with ""1"" would be the break points I should consider." |
278122 | Your biggest concern will be what happens during the transition period. In the past when my employer made a switch there has been a lockout period where you couldn't move money between funds. Then over a weekend the money moved from investment company A to investment Company B. All the moves were mapped so that you knew which funds your money would be invested in, then staring Monday morning you could switch them if you didn't like the mapping. No money is lost because the transfer is actually done in $'s. Imagine both investment companies had the same S&P 500 fund, and that the transfer takes a week. If when the first accounts are closed the S&P500 fund has a share value of $100 your 10 hares account has a value of $1000. If the dividend/capital gains are distributed during that week; the price per share when the money arrives in the second investment company will now be $99. So that instead of 10 shares @ $100 you now will buy 10.101 shares @ $99. No money was lost. You want that lookout period to be small, and you want the number of days you are not invested in the market to be zero. The lockout limits your ability to make investment changes, if for instance the central bank raises rates. The number of days out of the market is important if during that period of time there is a big price increase, you wouldn't want to miss it. Of course the market could also go lower during that time. |
278197 | Diversity of risk is always a good idea. The cheapest equity-based investment (in terms of management costs) is some form of tracker or indexed fund. They're relatively low risk and worth putting in a fixed amount for long-term investment. I agree with Ngu Soon Hui, you're going to need a lot of cash if you decide to start your own business. You may have to cover a significant amount of time without an income and you don't want all your cash tied up. However, putting all your money into one business is not good risk management. Keep some savings where they can be a lifeline, should you need it. |
278373 | "According to the book of Hull, american and european calls on non-dividend paying stocks should have the same value. American puts, however, should be equals to, or more valuable than, european puts. The reason for this is the time value of money. In a put, you get the option to sell a stock at a given strike price. If you exercise this option at t=0, you receive the strike price at t=0 and can invest it at the risk-free rate. Lets imagine the rf rate is 10% and the strike price is 10$. this means at t=1, you would get 11.0517$. If, on the other hand, you did'nt exercise the option early, at t=1 you would simply receive the strike price (10$). Basically, the strike price, which is your payoff for a put option, doesn't earn interest. Another way to look at this is that an option is composed of two elements: The ""insurance"" element and the time value of the option. The insurance element is what you pay in order to have the option to buy a stock at a certain price. For put options, it is equals to the payout= max(K-S, 0) where K=Strike Price and St= Stock price. The time value of the option can be thought of as a risk-premium. It's difference between the value of the option and the insurance element. If the benefits of exercising a put option early (i.e- earning the risk free rate on the proceeds) outweighs the time value of the put option, it should be exercised early. Yet another way to look at this is by looking at the upper bounds of put options. For a european put, today's value of the option can never be worth more than the present value of the strike price discounted at the risk-free rate. If this rule isn't respected, there would be an arbitrage opportunity by simply investing at the risk-free rate. For an american put, since it can be exercised at any time, the maximum value it can take today is simply equals to the strike price. Therefore, since the PV of the strike price is smaller than the strike price, the american put can have a bigger value. Bear in mind this is for a non-dividend paying stock. As previously mentioned, if a stock pays a dividend it might also be optimal to exercise just before these are paid." |
278460 | Flipping usually refers to real-estate transaction: you buy a property, improve/renovate/rehabilitate it and resell it quickly. The distinction between flipper and investor is similar to the distinction between trader and investor, even though the tax code doesn't explicitly refer to house flipping. Gains on house flipping can be considered as active business gain or passive activity income, which are treated differently: passive income goes on Schedule E and Schedule D, active income goes on Schedule C. The distinction between passive and active is based on the characteristics of the activity (hours you spent on it, among other things). Trading income can similarly be considered as either passive (Schedule D/E treatment) or active (Schedule C treatment). Here's what the IRS has to say about traders: Special rules apply if you are a trader in securities, in the business of buying and selling securities for your own account. This is considered a business, even though you do not maintain an inventory and do not have customers. To be engaged in business as a trader in securities, you must meet all of the following conditions: The following facts and circumstances should be considered in determining if your activity is a securities trading business: If the nature of your trading activities does not qualify as a business, you are considered an investor... Investor, in this context, means passive income treatment (Schedule D/E). However, even if your income is considered active (Schedule C), stock sale proceeds are not subject to the self-employment tax. As you can see, there's no specific definition, but the facts and circumstances matter. You may be considered a trader by the IRS, or you may not. You may want to be considered a trader (for example to be able to make a mark-to-market election), or you may not. You should talk to a professional tax adviser (EA/CPA licensed in your State) for more details and suggestions. |
278626 | At the area where I live (Finland), banks typically charge a lot more for additional mortgage credit taken after purchasing the house. So, if you are planning to purchase a house, and pay it with a mortgage, you get a very good rate, but if you pay back the mortgage and then realize you need additional credit, you get a much worse rate. So, if this is applicable to your area as well, I would simply buy stocks after you have paid enough of the mortgage that it is only 50% of the house price or so. This is especially good advice if you are young. Also, if your mortgage is a fixed rate and not an adjustable rate mortgage, you probably have a very low permanent interest rate on it as interest rates are low currently (adjustable rate mortgages will also have a low rate but it will surely go up). Some people say there's a bubble currently in the stock market, but actually the bubble is in the bond market. Stocks are expensive because the other alternatives (bonds) are expensive as well. Paying back your mortgage is equivalent to investing money in bonds. I don't invest in bonds at the current ridiculously low interest rates; I merely invest in stocks and have a small cash reserve that will become even smaller as I discover new investment opportunities. I could pay back a significant percentage (about 50%) of the loans I have by selling my stocks and using my cash reserves. I don't do that; I invest in stocks instead, and am planning to increase my exposure to the stock market at a healthy pace. Also, consider the fact that mortgage is cheap credit. If you need additional credit for consumption due to e.g. becoming suddenly unemployed, you will get it only at very expensive rates, if at all. If you're very near the retirement age (I'm not), this advice may not be applicable to you. Edit: and oh, if your mortgage is fixed rate, and interest rates have come down, the bank will require you to pay the opportunity cost of the unpaid interests. So, you may need to pay more than you owe the bank. Edit2: let's assume the bank offered you a 4% fixed rate for a 10-year loan, which you agreed to. Now let's also assume interest rates of new agreements have come down to 2%. It would be a loss to the bank to pay back the amount of the loan (because the bank cannot get 4% by offering somebody else a new loan, only 2%), unless you paid also 10 years * (4% - 2%) * amount = 20% * amount of lost interest income. At least where I live, in fixed rate loans, one needs to pay back the bank this opportunity cost of unpaid interests. |
278629 | Question (which you need to ask yourself): How well are your friends paid for their work? What would happen if you just took your money and bought a garage, and hired two car mechanics? How would that be different from what you are doing? The money that you put into the company, is that paid in capital, or is it a loan to the company that will be repaid? |
278653 | Quick get a Social Security Number for the child. You will need it before you file your taxes early next year. If you don't have a SSN for your child you will not be able to claim them as a dependent. If you applied for one already, many do so at the hospital, then wait for it to arrive. The next step is to open a savings account with the child's SSN. Then have your parent write the check in the child's name and deposit it into the account. If it is written in the child's name already then you don't need a new check from them. If the check is large, you may run into problems if you take a check in the name of a minor and try and deposit it into your account. The bank would have no idea that the person is related to you. |