Datasets:

pavanmantha

/

fiqa

like 0

Intrinsic value of non-voting shares which don't pay dividends

["Even with non-voting shares, you own a portion of the company including all of its assets and its future profits. If the company is sold, goes out of business and liquidates, etc., those with non-voting shares still stand collect their share of the funds generated. There's also the possibility, as one of the comments notes, that a company will pay dividends in the future and distribute its assets to shareholders that way. The example of Google (also mentioned in the comments) is interesting because when they went to voting and non-voting stock, there was some theoretical debate about whether the two types of shares (GOOG and GOOGL) would track each other in value. It turned out that they did not - People did put a premium on voting, so that is worth something. Even without the voting rights, however, Google has massive assets and each share (GOOG and GOOGL) represented ownership of a fraction of those assets and that kept them highly correlated in value. (Google had to pay restitution to some shareholders of the non-voting stock as a result of the deviation in value. I won't get into the details here since it's a bit of tangent, but you could easily find details on the web.)", 'Some companies offer discounts for shareholders. I believe Disney used to do so, for example; if your family was doing the Disneyland-every-year routine that could be a significant benefit.']

How to shop for mortgage rates ?

["I asked my realtor, but she recommends to go with just one banker (her friend), and not to do any rate shopping. You need a new realtor. Anyone who would offer such advice is explicitly stating they are not advocating on your behalf. I'd do the rate shopping first. When you make an offer, once it's accepted, time becomes critical. The seller expects you to go to closing in so many days after signing the P&S. The realtor is specifically prohibited from pushing a particular lender on you. She should know better. In response to comment - Rate Shopping can be as simple as making a phone call, and having a detailed conversation. Jasper's list can be conveyed verbally. Prequalification is the next step, where a bank actually writes a letter indicating they have a high confidence you will qualify for the loan.", '"You can shop for a mortgage rate without actually submitting a mortgage application. Unfortunately, the U.S. Government has made it illegal for the banks to give you a ""good faith estimate"" of the mortgage cost and terms without submitting a mortgage application. On the other hand, government regulations make the ""good faith estimates"" somewhat misleading. (For one thing, they rarely are good for estimating how much money you will need to ""bring to the closing table"".) My understanding is that in the United States, multiple credit checks within a two-week period while shopping for a mortgage are combined to ding your credit rating only once. You need the following information to shop for a mortgage: A realistic ""appraisal value"". Unless your market is going up quickly, a fair purchase price is usually close enough. Your expected loan amount (which you or a banker can estimate based on your down payment and likely closing costs). Your middle credit score, for purposes of mortgage applications. (If you have a co-borrower, such as a spouse, many banks use the lower of the two persons\' middle credit score). The annual property tax cost for the property, taking into account the new purchase price. The annual cost of homeowners\' insurance. The annual cost of homeowners\' association dues. Your minimum monthly payments on all debt. Banks tend to round up the minimum payments. Also, banks care whether any of that debt is secured by real estate. Your monthly income. Banks usually include just the amount for which you can show that you are currently in the job, with regular paychecks and tax withholding, and that you have been in similar jobs (or training for such jobs) for the last two full years. Banks usually subtract out any business losses that show up on tax returns. There are special rules for alimony and child support payments. The loan terms you want, such as a 15-year fixed rate or 30-year fixed rate. The amount of points you are willing to pay. Many banks are willing to lower your ""note rate"" by 0.125% if you pay 0.5% up-front. The pros and cons of paying points is a good topic for another question. Whether you want a so-called ""no-fee"" or ""no-closing cost"" loan. These loans cost less up-front, but have a higher ""note rate"". Unless you ask for a ""no-fee"" or ""no-closing cost"" loan, most banks have similar charges for things like: So the big differences are usually in: As discussed above, you can come up with a simple number for (roughly) comparing fixed-rate mortgage loan offers. Take the loan origination (and similar) fees, and divide them by the loan amount. Divide that percentage by 4. Add that percentage to the ""note rate"" for a loan with ""no points"". Use that last adjusted note rate to compare offers. (This method works because you have the choice of using up-front savings to pay ""points"" to lower the ""note rate"".) Notice that once you have your middle credit score, you can ask other lenders to estimate the information above without actually submitting another loan application. Because the mortgage market fluctuates, you should compare rates on the same morning of the same day. You might want to check with three lenders, to see if your real estate agent\'s friend is competitive:"', "Pre-qualification is only a step above what you can do with a rate/payment calculator. They don't check your credit history and credit score; they don't ask for verification of your income; or verify that you have reported your debts correctly. They also don't guarantee the interest rate. But if you answer truthfully, and completely, and nothing else changes you have an idea of how much you can afford factoring in the down payment, and estimates of other fees, taxes and insurance. You can get pre-quaified by multiple lenders; then base your decision on rates and fees. You want to get pre-approved. They do everything to approve you. You can even lock in a rate. You want to finalize on one lender at that point because you will incur some fees getting to that point. Then knowing the maximum amount you can borrow including all the payments, taxes, insurance and fees; you can make an offer on a house. Once the contract is accepted you have a few days to get the appraisal and the final approval documents from the lender. They will only loan you the minimum of what you are pre-approved for and the appraisal minus down-payment. Also don't go with the lender recommended by the real estate agent or builder; they are probably getting a kick-back based on the amount of business they funnel to that company."]

Do you have to be mega-rich to invest in companies pre-IPO?

['"Short answer: No. Being connected is very helpful and there is no consequence by securities regulators against the investor by figuring out how to acquire pre-IPO stock. Long answer: Yes, you generally have to be an ""Accredited Investor"" which basically means you EARN over $200,000/yr yourself (or $300,000 joint) and have been doing so for several years and expect to continue doing so OR have at least 1 million dollars of net worth ( this is joint worth with you and spouse). The Securities Exchange Commission and FINRA have put a lot of effort into keeping most classes of people away from a long list of investments."', '"No you don\'t have to be super-rich. But... the companies do not have to sell you shares, and as others mention the government actively restricts and regulates the advertising and sales of shares, so how do you invest? The easiest way to obtain a stake is to work at a pre-IPO company, preferably at a high level (e.g. Director/VP of under water basket weaving, or whatever). You might be offered shares or options as part of a compensation package. There are exemptions to the accredited investor rule for employees and a general exemption for a small number of unsolicited investors. Also, the accredited investor rule is enforced against companies, not investors, and the trend is for investors to self-certify. The ""crime"" being defined is not investing in things the government thinks are too risky for you. Instead, the ""crime"" being defined is offering shares to the public in a small business that is probably going to fail and might even be a scam from the beginning. To invest your money in pre-IPO shares is on average a losing adventure, and it is easy to become irrationally optimistic. The problem with these shares is that you can\'t sell them, and may not be able to sell them immediately when the company does have an IPO on NASDAQ or another market. Even the executive options can have lock up clauses and it may be that only the founders and a few early investors make money."', "There are a couple of ways to buy into a private company. First, the company can use equity crowd funding (approved under the JOBS act, you don't need to be an accredited investor for this). The offering can be within one state (i.e. Intrastate offerings) which don't have the same SEC regulations but will be governed by state law. Small companies (small assets, under $1 million) can be made under Regulation D, Rule 504. For assets under $5 million, there is Rule 505, which allows a limited number of non-accredited investors. Unfortunately, there aren't a lot of 504 and 505 issues. Rule 506 issues are common, and it does allow a few non-accredited investors (I think 35), but non-accredited investors have to be given lots of disclosure, so often companies use a Rule 506 issue but only for accredited investors."]

Would it ever be a bad idea to convert a traditional IRA to a Roth IRA with the following assumptions?

["Taking all your assumptions: With Roth, you take $6112 from work, (let's call you tax rate 10%) pay $612 in taxes, and contribute $5500 (the max if you are younger than 50). This $5500 will grow to $21,283 in 20 years at 7% annual growth ($5500*(1.07^20)), and you will pay no additional taxes on it. With the traditional IRA, you take $6112 from work, pay $612 in taxes, and contribute $5500. You will receive a tax deduction at tax time of $612 for the contribution. This money will also grow to $21,283. This will be taxed at your ordinary income rate (which we're calling 10%), costing you $2123 at the time of withdrawal. You will have $19,155 left over. EDIT: If you invest your tax savings from every contribution to the Traditional IRA, then the numbers wash out. Perhaps a pivotal question is whether you believe you will have greater taxable earnings from your investments in retirement than you have in taxable earnings today -- affecting the rate at which you are taxed.", "Even if you're paying a lot of taxes now, you're talking marginal dollars when you look at current contribution, and average tax rate when making withdrawals. IE, if you currently pay 28% on your last dollar (and assuming your contribution is entirely in your marginal rate), then you're paying 28% on all of the Roth contributions, but probably paying a lower average tax rate, due to the lower tax rates on the first many dollars. Look at the overall average tax rate of your expected retirement income - if you're expecting to pull out $100k a year, you're probably paying less than 20% in average taxes, because the first third or so is taxed at a very low rate (0 or 15%), assuming things don't change in our tax code. Comparing that to your 28% and you have a net gain of 8% by paying the taxes later - nothing to shake a stick at. At minimum, have enough in your traditional IRA to max out the zero tax bucket (at least $12k). Realistically you probably should have enough to max out the 15% bucket, as you presumably are well above that bucket now. Any Roth savings will be more than eliminated by this difference: 28% tax now, 15% tax later? Yes please. A diversified combination is usually best for those expecting to have a lot of retirement savings - enough in Traditional to get at least $35k or so a year out, say, and then enough in Roth to keep your comfortable lifestyle after that. The one caveat here is in the case when you max out your contribution levels, you may gain by using money that is not in your IRA to pay the taxes on the conversion. Talk to your tax professional or accountant to verify this will be helpful in your particular instance.", '"To answer your question point by point - I\'d focus on the last point. The back of my business card - Let\'s focus on Single. The standard deduction and exemption add to over $10K. I look at this as ""I can have $250K in my IRA, and my $10K (4%) annual withdrawal will be tax free. It takes another $36,900 to fill the 10 and 15% brackets. $922K saved pretax to have that withdrawn each year, or $1.17M total. That said, I think that depositing to Roth in any year that one is in the 15% bracket or lower can make sense. I also like the Roth Roulette concept, if only for the fact that I am Google\'s first search result for that phrase. Roth Roulette is systematically converting and recharacterizing each year the portion of the converted assets that have fallen or not risen as far in relative terms. A quick example. You own 3 volatile stocks, and convert them to 3 Roth accounts. A year later, they are (a) down 20%, (b) up 10%, (c) up 50%. You recharacterize the first two, but keep the 3rd in the Roth. You have a tax bill on say $10K, but have $15K in that Roth."']

Recommended education path for a future individual investor?

['"For a job doing that kind of stuff, what is PREFERRED is 4 year undergrad at ivy league school + 2 year MBA at ivy league school, and then several more years of experience, which you can sort of get by interning while in school this will of course saddle you with debt, which is counterintuitive to your plans basically, the easy way up is percentage based compensation. without knowing the right people, you will get a piss poor salary regardless of what you do, in the beginning. so portfolio managers earn money by percentage based fees, and can manage millions and billions. real estate agents can earn money by percentage based commissions if they close a property and other business venture/owners can do the same thing. the problem with ""how to trade"" books is that they are outdated by the time they are published. so you should just stick with literature that teaches a fundamental knowledge of the products you want to trade/make money from. ultimately regardless of how you get/earn your initial capital, you will still need to be an individual investor to grow your own capital. this has nothing to do with being a portfolio manager, even highly paid individuals on wall street are in debt to lavish expenditures and have zero capital for their own investments. hope this helps, you really need to be thinking in a certain way to just quickly deduce good ideas from bad ideas"', "My plan is that one day I can become free of the modern day monetary burdens that most adults carry with them and I can enjoy a short life without these troubles on my mind. If your objective is to achieve financial independence, and to be able to retire early from the workforce, that's a path that has been explored before. So there's plenty of sources that you might want to check. The good news is that you don't need to be an expert on security analysis or go through dozens of text books to invest wisely and enjoy the market returns. This is the Bogleheads philosophy. It's widely accepted by people in academia, and thoroughly tested. Look into it further if you want to see the rationale behind, but, to sum it up: It doesn't matter how expert you are. The idea of beating the market, that an index fund tracks, is about 'outsmarting' the rest of investors. That would be difficult, even if it was a matter of skill, but when it comes to predicting random events we're all equally clueless. *Total Expense Ratio: It gives an idea of how expensive is a given fund in terms of fees. Actively managed funds have higher TER than indexed ones. This doesn't mean there aren't index funds with, unexplainable, high TER out there.", "It depends on whether you want a career as a fund manager/ analyst or if you want to be an investor/ trader. A fund manager will have many constraints that a private investor doesn’t have, as they are managing other people’s money. If they do invest their own money as well they usually would invest it differently from how they invest the fund's money. Many would just get someone else to invest their money for them, just as a surgeon would get another surgeon to operate on a family member. My suggestion to you is to find a job you like doing and build up your savings. Whilst you are building up your savings read some books. You said you don’t know much about the financial markets, then learn about them. Get yourself a working knowledge about both fundamental and technical analysis. Work out which method of analysis (if not both) suits you best and you would like to know more about. As you read you will get a better idea if you prefer to be a long term investor or a short term trader or somewhere in-between or a combination of various methods. Now you will start to get an idea of what type of books and areas of analysis you would like to concentrate on. Once you have a better idea of what you would like to do and have gained some knowledge, then you can develop your investment/trading plan and start paper trading. Once you are happy with you plan and your paper trading you can start trading with a small account balance (not more than $10,000 and preferably under $5,000). No matter how well you did with paper trading you will always do worse with real money at first due to your emotions being in it now. So always start off small. If you want to become good at something it takes time and a lot of hard work. You can’t go from knowing nothing to making a million dollars per year without putting in the hard yards first."]

Investing in low cost index fund — does the timing matter?

["If you're worried about investing all at once, you can deploy your starting chunk of cash gradually by investing a bit of it each month, quarter, etc. (dollar-cost averaging). The financial merits and demerits of this have been debated, but it is unlikely to lose you a lot of money, and if it has the psychological benefit of inducing you to invest, it can be worth it even if it results in slightly less-than-optimal gains. More generally, you are right with what you say at the end of your question: in the long run, when you start won't matter, as long as you continue to invest regularly. The Boglehead-style index-fund-based theory is basically that, yes, you might save money by investing at certain times, but in practice it's almost impossible to know when those times are, so the better choice is to just keep investing no matter what. If you do this, you will eventually invest at high and low points, so the ups and downs will be moderated. Also, note that from this perspective, your example of investing in 2007 is incorrect. It's true that a person who put money in 2007, and then sat back and did nothing, would have barely broken even by now. But a person who started to invest in 2007, and continued to invest throughout the economic downturn, would in fact reap substantial rewards due to continued investing throughout the post-2007 lows. (Happily, I speak from experience on this point!)", "Yes timing does matter. Using a simple Rate of Change indicator over the past 100 days and smoothed out with a 50 day Moving Average, I have plotted the S&P 500 since the start of 2007. The idea is to buy when the ROC indicator crosses above the zero line and sell when the ROC indicator crosses below the zero line. I have compared the results below of timing the markets from the start of 2007 to dollar cost averaging starting from the start of 2007 and investing every 6 months. $80k is invested in both cases. For the timing the market option $80k was invested at the start of 2007, then the total figure was sold out when a sell signal was given, then the total amount reinvested when a new buy signal was given. For the DCA option $5000 was invested every 6 months starting from the start of 2007 until the last investment at the start of July 2014. The results are below: Timing the markets results in more than double the returns (not including dividends and brokerage). Edit It has been brought up that I haven't considered tax in my Timing the Market option. So I have updated my timing the market spread-sheet to take into account both long-term and short-term CGT in the USA for someone on the highest tax bracket. The results are below: The result is still almost a 2x higher returns for the timing the markets option. Also note that even with the DCA option you will have to sell one day and pay CGT on any profits there. However, the real danger with the DCA option is if you need to sell during a market downturn and not make any profits at all.", "When you start investing makes a very large difference to the outcome, but that is on the time scale of what generation you were born into, not what week you choose to open your 401(k). As you note in your last sentence, there is nothing that you can do about this, so there is no point in worrying about it. If you could successfully market time successfully, then that would make a difference even at smaller time scales. But you probably can't, so there is no point in worrying about that either. As BrenBarn points out, your statement about not regaining their net worth until 2013 applies to someone who invested a lump sum at the 2007 peak, not to someone who invested continuously throughout. By my calculation, if you started continuously investing in a broad market index at the peak (around Jun 4, 2007), you would have recovered your net worth (relative to investing in a safe instrument that merely kept up with inflation, a hard thing to find these days) around April 12, 2010. I've done the computation on each business day because that is easier, so it might be slightly worse if do the periodic investment on each payday which is much more realist for a 401(k). (And of course if you need to preserve/recover you net worth in 3 years, you shouldn't be in stocks in the first place)", "A much less verbose answer is. Don't worry about buying low. You have a whole lifetime to dollar cost average your retirement dollars."]

Is it legal for a landlord to report a large payment to a tenant using Form 1099?

["I believe it's not only legal, but correct and required. A 1099 is how a business reports payments to others, and they're required by the IRS to send them for payments of $600 or more (for miscalleneous payments like this). The payment is an expense to the landlord and income to you, and the 1099 is how that's documented (although note that if they don't send you a 1099, it's still income to you and you still need to report it as such). It's similar to getting a 1099-INT for interest payments or a 1099-DIV for dividend payments. You'll get a 1099-MISC for a miscellaneous payment. If you were an employee they'd send you a W-2, not a 1099.", '"It is legal. They\'re probably going to give you a 1099-MISC, which is required of businesses for many cash payments over $600 in value to all sorts of counterparties. (Probably box 3 of 1099-MISC as is typical in ""cash for keys"" situations where one is paid to vacate early) A 1099-MISC is not necessarily pure income, but in this case, you do have money coming in. This money isn\'t a return of your security deposit or a gift. The payment could possibly be construed by you as a payment to make you whole, but the accounting for this would be on you. This is not a typical situation for IRS reporting. However, if you are uncomfortable with potentially explaining to the IRS how you implemented advice from strangers over the internet, the safest course is to report it all as income. Look at it this way: you did enter into a mutual contract, where you were paid consideration to release your leasehold interests in the property."']

Primerica: All it claims to be?

['"Primerica\'s primary value proposition is that switching from whole or universal life to term life, and investing the difference is a good idea for most people. However, there are a number of other important factors to consider when purchasing life insurance, and I would also be wary of anyone claiming that one product will be the ""best"" for you under all circumstances. Best Insurance? Without getting into a much larger discussion on how to pick insurance companies or products, here are a few things that concern me about Primerica: They have a ""captive"" sales force, meaning their agents sell only Primerica products. This means that they are not shopping around for the best deal for you. Given how much prices on term life have changed in recent years, I would highly recommend taking the time to get alternate quotes online or from an independent broker who will shop around for you. Their staff are primarily part-time employees. I am not saying they are incompetent or don\'t care, just that you are more likely to be working with someone for whom insurance is not their primary line of work. If you have substantial reason to believe that you may someday need whole life, their products may not suit you well. Primerica does not offer whole life as far as I am aware, which also means that you cannot convert your term life policy through them to whole life should you need to do so. For example, if you experience an accident, are disabled, or have a significant change in your health status in the future and do not have access to a group life policy, you may be unable to renew your individual policy. Above Average Returns? I am also highly skeptical about this claim. The only possible context in which I could find this valid would be if they mean that your returns on average will be better if you invest in the stock market directly as compared to the returns you would get from the ""cash value"" portion of a life insurance product such as universal life, as those types of products generally have very high fees. Can you clarify if this is the claim that was made, or if they are promising returns above those of the general stock market? If it is the latter, run! Only a handful of superstar investors (think Warren Buffet, Peter Lynch, and Bill Gross) have ever consistently outperformed the stock market as a whole, and typically only for a limited period of time. In either case, I would have the same concerns here as stated in reasons #1 and #2 above. Even more so than with insurance, if you need investment advice, I\'d recommend working with someone who is fully dedicated to that type of work, such as a fee-only financial planner (http://www.napfa.org/ is a good place to find one). Once you know how you want to invest, I would again recommend shopping around for a reputable but inexpensive broker and compare their fees with Primerica\'s. Kudos on having a healthy level of skepticism and listening to your gut. Also, remember that if you are not interested in their offer, you don\'t have to prove them wrong - you can simply say ""no thank you."" Best of luck!"', '"Probably not, though there are a few things to be said for understanding what you are doing here. Primerica acts as an independent financial services firm and thus has various partners that specialize in various financial instruments and thus there may exist other firms that Primerica doesn\'t use that could offer better products. Now, how much do you want to value your time as it could take more than a few months to go through every possible insurance firm and broker to see what rate you could get for the specific insurance you want. There is also the question of what constitutes best here. Is it paying the minimal premiums before getting a payout? That would be my interpretation though this requires some amazing guesswork to know when to start paying a policy to pay out so quickly that the insurance company takes a major loss on the policy. Similarly, there are thousands of mutual funds out there and it is incredibly difficult to determine which ones would be best for your situation. How much risk do you want to take? How often do you plan to add to it? What kind of accounts are you using for these investments, e.g. IRAs or just regular taxable accounts? Do tax implications of the investments matter? Thus, I\'d likely want to suggest you consider this question: How much trust do you have that this company will work well for you in handling the duty of managing your investments and insurance needs? If you trust them, then buy what they suggest. If you don\'t, then buy somewhere else but be careful about what kind of price are you prepared to pay to find the mythical ""best"" as those usually only become clear in hindsight. When it comes to trusting a company in case, there are more than a few factors I\'d likely use: Questions - How well do they answer your questions or concerns from your perspective? Do you feel that these are being treated with respect or do you get the feeling they want to say, ""What the heck are you thinking for asking that?"" in a kind of conceited perspective. Structure of meeting - Do you like to have an agenda and things all planned out or are you more of the spontaneous, ""We\'ll figure it out"" kind of person? This is about how well do they know you and set things up to suit you well. Tone of talk - Do you feel valued in having these conversations and working through various exercises with the representative? This is kind of like 1 though it would include requests they have for you. Employee turnover - How long has this person been with Primerica? Do they generally lose people frequently? Are you OK with your file being passed around like a hot potato? Not that it necessarily will but just consider the possibility here. Reputation can be a factor though I\'d not really use it much as some people can find those bad apples that aren\'t there anymore and so it isn\'t an issue now. In some ways you are interviewing them as much as they are interviewing you. There are more than a few companies that want to get a piece of what you\'ll invest, buy, and use when it comes to financial products so it may be a good idea to shop around a little."', '"I was a Primerica representative, left to be on my own, and then returned. Insurance is one matter that depends on the individual. Some do not need it. For example, when I was an independent agent with an independent marketing organization (IMO) (oh yes! multi-level is everywhere, dont kid yourself) I had an upline as well. We were pushed to sell final expense [burial insurance]. As an ethical agent, I believe this is a bad business practice. Primerica does not sell unneeded insurance to old people. How can you justify selling the elderly, insurance to cover them for $10,000, at almost 100 to 150 a month? I told my elderly potential clients, after seeing they live on a tight budget, that they were better off purchasing a cremation policy or funeral package than burial insurances as it would save them money in the long run. Primerica is right in saying they are the only ones out there catering to the Working Class and Middle-America. Where else can you start an Individual Retirement Account (IRA) with $25 a month? Nowhere! All the other insurance producers want more money. They don\'t want to spend their time with what they call ""losers"". I love showing Poor people how the Rich get richer. Poor people should know the truth."']

Do retailers ever stock goods just to make other goods sell better?

['"There\'s a concept in retail called a ""loss leader"", and essentially it means that a store will sell an item intentionally at a loss as a way of bringing in business in the hope that while consumers are in the store taking advantage of the discounted item, they\'ll make other purchases to make up for the loss and generate an overall profit. Many times it only makes sense to carry items that enhance the value of something else the store sells. Stores pay big money to study consumer behaviors and preferences in order to understand what items are natural fits for each other and the best ways to market them. A good example of what you\'re talking about is the fact that many grocery stores carry private label products that sell for higher margins, and they\'ll stock them alongside the name brands that cost much more. As a consequence (and since consumers often don\'t see a qualitative difference between store brands and name brands much of the time to rationalize spending more), the store\'s own brands sell better. I hope this helps. Good luck!"', 'They may stock items that frame the various price points. Of course they risk having the items go stale before they are sold. You also have situations where the store will advertise an item, but end up taking a loss on that sale because it will bring people in, and they will make other purchases. Determining what to stock, how to display it, and how to advertise it involves both math and psychology.', '"That happens all the time. The best situation for this to happen is when you have several products, each a bit better and a bit more expensive than the other, and you add a new product which is the cheapest. That gets people into the store to look at the cheapest product, and then you show the the next more expensive which is so much better for only a little more money, and the next more expensive which is again so much better... You might not sell any of the cheapest product but it helps you sell the others. Also happens the other way round: You add a really expensive item, unaffordable for most customers, that is really, really nice. Then customers look at it and you show them that for half the price they can have something that is almost as nice. The expensive product increases the amount that customers think is ""the right price"" for that kind of product. A customer might think that $2,000 for a diamond ring is an awful lot of money, but if you show them another ring for $5,000 then suddenly the $2,000 doesn\'t look that expensive anymore. And if it is almost as nice as the $5,000 ring, you sell a lot of rings for $2,000 because you had the more expensive ring in the store."', "Use of this is demonstrated in this video: https://youtu.be/Ip5jG3djdyk Stocking products that you have no intention of selling can be used to make other products look more appealing by comparison. It's more psychological than anything but it isn't an uncommon practice."]

Which dividend bearing stock should be chosen by price?

["Don't ever quantify a stock's preference/performance just based on the dividend it is paying out Volatility defined by movements in the the stock's price, affected by factors embedded in the stock e.g. the corporation, the business it is in, the economy, the management etc etc. Apple wasn't paying dividends but people were still buying into it. Same with Amazon, Berkshire, Google. These companies create value by investing their earnings back into their company and this is reflected in their share prices. Their earnings create more value in this way for the stockholders. The holding structures of these companies also help them in their motives. Supposedly $100 invested in either stocks. For keeping things easy, you invested at the same time in both, single annual dividend and prices more or less remain constant. Company A: $5/share at 20% annual dividend yield. Dividend = $20 Company B: $10/share at 20% annual dividend yield Dividend = $20 You receive the same dividend in both cases. Volatility willn't affect you unless you are trading, or the stock market tanks, or some very bad news comes out of either company or on the economy. Volatility in the long term averages out, except in specific outlier cases e.g. Lehman bankruptcy and the financial crash which are rare but do happen. In general case the %price movements in both stocks would more or less follow the markets (not exactly though) except when relevant news for either corporations come out.", "Price doesn't mean anything. Price is simply total value (market capitalization) divided by number of shares. Make sure you consider historical dividends when hunting for big yields. It's very possible that the data you're pulling is only the annualized yield on the most recent dividend payment. Typically dividends are declared in dollar terms. The total amount of the dividend to be issued is then divided by the number of shares and paid out. Companies rarely (probably never but rarely to avoid the peanut gallery comments about the one company that does this) decide dividend payments based on some proportion of the stock price. Between company A and company B paying approximately the same historical yield, I'd look at both companies to make sure neither is circling the tank. If both look strong, I'd probably buy a bit of both. If one looks terrible buy the other one. Don't pick based on the price.", 'A 20% dividend yield in most companies would make me very suspicious. Most dividend yields are in the 2-3% range right now and a 20% yield would make me worry that the company was in trouble, the stock price had crashed and the dividend was going to be cut, the company was going to go out of business or both.', "In the scenario you describe, the first thing I would look at would be liquidity. In other words, how easy is it to buy and sell shares. If the average daily volume of one share is low compared to the average daily volume of the other, then the more actively traded share would be the more attractive. Low volume shares will have larger bid-offer spreads than high volume shares, so if you need to get out of position quickly you will be at risk of being forced to take a lowball offer. Having said that, it is important to understand that high yielding shares have high yields for a reason. Namely, the market does not think much of the company's prospects and that it is likely that a cut in the dividend is coming in the near future. In general, the nominal price of a share is not important. If two companies have equal prospect, then the percentage movement in their share price will be about the same, so the net profit or loss you realise will be about the same."]

What does ES1 refer to in this picture?

['ES1 is the Bloomberg symbol for the CME E-mini S&P 500 front-month continuous contract. ES2, ES3, etc. will likewise yield the 2nd and 3rd months. Which exact futures contract this symbol refers to will change about once a month.', "That looks like a Bloomberg terminal. And like @Jer said, it would appear to be the symbol for the S&P 500 E-mini index future. Although it doesn't look right all on its own, as it should have a modifier indicating the month (or quarter) of expiry. However, since it appears on a Bloomberg terminal in the image, I checked a source for Bloomberg Symbol Lists and found one of two possibilities for ES1. It is most likely the S&P 500 e-mini future: CME E-Mini Futures E-Mini S&P 500 ES1 INDEX the only alternative was LIFFE 3 Month Euroswiss ES1 COMDTY I think the former is far more likely, as the latter has the COMDTY commodity tag instead of INDEX as the tag in the image. Also, it isn't the ESI which pertains to Ethibel Sustainability Indices and something with the Eurozone (also Bloomberg Indices). Here we go! Excerpt straight is from a presentation presentation on charting from a business school PDF see pp.12-13, and appears to be a straight excerpt from September 2007 Bloomberg documentation. I didn't know any other way to imbed it besides taking a screen shot then uploading to imgur. Or of course, see pp.12-13 in the referenced PDF I've attached. See", "That looks very much like an S&P 500 E-Mini index future. However, ES1 is a strange symbol. Futures have the month of expiry encoded in their symbol as well: http://commodities.about.com/od/understandingthebasics/ss/futurescontract_3.htm For example, the September 2011 future in this series would be ESU1. I'm not very familiar with Bloomberg so perhaps this is the front contract (i.e. the one that's closest to expiry (in the is case the September 2011 one)). Only problem is that prices don't exactly match what CME has (high of 1190 and low of 1186.25, for when this page gets out of date): http://www.cmegroup.com/trading/equity-index/us-index/e-mini-sandp500.html - but they are so close I suspect it must be some sort of S&P 500 index future."]

Can a credit card company raise my rates for making a large payment?

['"No. That\'s pretty unlikely. Card issuers typically base your rate on your credit score. Paying down debt reduces your percent of available credit used, and improves your score until you are in the 1-20% range. That\'s optimum. To this issuer, you are one of a million customers, there\'s no emotion in this, just numbers to them. For what it\'s worth, if a card issuer raises your rate, you are permitted to ""not accept"" the rate, stop using the card for new charges, and pay at the current rate. Of course this doesn\'t apply to zero interest deals, only to increases to your regular rate."', '"Short answer: No, not normally. Long Answer: It depends on the contract. If the 14% is some sort of special offer, with conditions, then if you violate those conditions, they can jack you up to whatever the \'normal\' rate is. But outside of that condition, I can\'t see any reason why they would wish to penalize you for making a payment. You will note that there is no ""maximum"" payment on the bill. Secondly, even if they do jack up the rate to 28%, you\'re still better off paying $70 on 3000, than you are paying ~120 on 10k. Then tell them where to stick their card and get a new one."', '"No. Credit card companies will typically not care about your individual credit card account. Instead they look either at a ""package"" of card accounts opened at roughly the same time, or of ""slices"" of cardholder accounts by credit rating. If an entire package\'s or slice\'s balance drops significantly, they\'ll take a look, and will adjust rates accordingly (often they may actually decrease rates as an incentive to increase you use of the card). Because credit card debt is unstructured debt, the bank cannot impose an ""early payment penalty"" of any kind (there\'s no schedule for paying it off, so there\'s no way to prove that they\'re missing out on $X in interest because you paid early). Generally, banks don\'t like CC debt anyway; it\'s very risky debt, and they often end up writing large balances off for pennies on the dollar. So, when you pay down your balance by a significant amount, the banks breathe a sigh of relief. The real money, the stable money, is in the usage fees; every time you swipe your card, the business who accepted it owes the credit card company 3% of your purchase, and sometimes more."']

What tax advantage should I keep an eye for if I am going to relocate?

['"Look for states that have no income tax. A lot of these states supplement their revenue with higher property taxes, but if you rent and do not own property in the state, then you will have no state tax liability. Similarly, many states treat capital gains no differently than income tax, so if you make your earnings due to a large nest egg, then way you will still incur no tax liability on the state level Look for ""unincorporated"" areas, as these are administrative divisions of states that do not have a municipal government, and as such do not collect local taxes. Look for economic development perks of the new jurisdiction. Many states have some kind of formal tax credit for people that start business or buy in certain areas, but MONEY TALKS and you can make an individual arrangement with any agency, municipality etc. If the secretary at city hall doesn\'t know about a prepackaged formal arrangement that is offered to citizens, then ask for the ""expedited development package"" which generally has a ""processing fee"" involved. This is something you make up ie. ""What is the processing fee for the expedited development package, quote on quote"" States like Maryland and Nevada have formalized this process, but you are generally paying off the Secretary of State for favorable treatment. You\'ll always be paying off someone."', '"Depends. If you can choose where to relocate to, then I second the ""no income tax"" states. But even of these chose wisely, some have no income taxes at all, others have taxes on some kinds of income. Some don\'t have neither individual nor corporate taxes, some tax businesses in some ways. Some compensate with higher property taxes, others compensate with higher sales taxes. On the other hand, you might prefer states with income taxes but no sales taxes. It can happen if your current income is going to be low, but you\'ll be spending your savings. If you don\'t have a choice (for example, your employer wants you to move closer to their office), then you\'re more limited. Still, you can use the tax break on moving expenses (read the fine print, there are certain employment requirements), and play with the state taxes (if you\'re moving to a state with less/no taxes - move earlier, if its the other way - move later). Check out for cities that have income taxes. In some states it cannot happen by law (for example, in California only the state is allowed to collect income taxes), in others it is very common (Ohio comes to mind). Many things to consider in New York. New York City has its own income tax (as well as Yonkers, as far as I remember these are the only ones in the State of New York). So if you want to save on taxes in NYS but live close to the city, consider White Plains etc. If you work in NYC its moot, you\'re going to pay city taxes anyway. That is also true if you live in NJ but work in the city, so tax-wise it may be more efficient not to live across state lines from your place of work."']

What determines a tax resident in Florida

["Plenty of retired people do stay in the US for longer than 60 days and don't pay taxes. In this IRS document 60 days stay appears to be the test for having a 'substantial presence' in the US, which is part of the test for determining residency. However the following is also written: Even if you meet the substantial presence test, you can be treated as a nonresident alien if you are present in the United States for fewer than 183 days during the current calendar year, you maintain a tax home in a foreign country during the year, and you have a closer connection to that country than to the United States. In other words, if your property in the US is not your main one, you pay tax in another country, and you stay there less than half the year, you should be treated as a non-resident (I am not a lawyer and this is not advice). This IRS webpage describes the tax situation of nonresident aliens. As I understand it, if you are not engaged in any kind of business in the US and have no income from US sources then you do not have to file a tax return. You should also look into the subject of double tax agreements. If your home country has one, and you pay taxes there, you probably won't need to pay extra tax to the US. But again, don't take my word for it.", '"I think the 60 days/year come from the IRS tax residency determination, which isn\'t a Florida law but applies to all the states. Have a look at the ""substantial presence"" paragraph to see where the 60 days are coming from."']

At what point does it become worth it to file an insurance claim?

["An article linked from cnn.com has some great advice, which I think are good rules of thumb. Also, at least my insurance gives a premium price for those who haven't filed a claim in 5 or more years for homeowners or rental insurance. See if you have a similar discount, will loose it, and guess how much that will cost you over 5 years. My rule of thumb: Your premium might go up quite a bit, possibly as much as triple, especially for a large claim. But, it is certainly worth it if you are going to get more than triple your premium through your claim. The worst case: Mortgage mandated insurance, which will be about triple your current cost.", "At what point can you not afford the repair, and how will that repair affect your home? In your scenario, you would be claiming $1, which I could agree is universally bad. A good tip is to raise the deductible to the point you feel you can cover on your own so you aren't tempted. (It would lower your premium too) This is what an emergency fund is for. In your examples, if you have $10K in an emergency fund, don't file a claim. If you have no emergency fund, and your roof is missing, I would suggest filing a claim. If you have no money, but the claim is to fix something that you could ignore (missing a back porch? Lock the back door and don't go out of it) then save the $10K and pay for it out of pocket. When it doubt, pay for it out of pocket if possible.", '"We learned the hard way on this one. First, our area was hit with what was called an ""inland hurricane"" where we forced to file a claim as our home received extensive damage. Within the same year, we also incurred an electrical surge which took out our older big screen tv (one of those big monstrosities that sits on the floor). We were granted full replacement with a more modern flat screen TV, TV stand, and DVD player. It seemed like a no brainer. We quickly found it as our premium went up that it wasn\'t that sweet. It wasn\'t a huge increase, but it definitely has us truly evaluate if it\'s really necessary filing a claim."']

Do US banks exchange info with countries abroad?

["Banks do not report transactions within accounts except as required by law, usually as part of anti-money-laundering efforts. Generally those involve tracking large cash transactions. As far as large payments go, there are two reasons they might be reported to the government: taxes, and criminal investigations. For tax purposes, if the payment is considered a salary or wage (that is, you are an employee of the company and the payment is for your time working there), then the company paying you is responsible for reporting the wage and withholding applicable taxes from your salary. If you are considered an independent contract employee, then you yourself will be responsible for reporting the income to the IRS and paying the applicable taxes yourself. In the second case, unless you are already under investigation, I wouldn't worry about it. Banks are very touchy about financial records being kept private, and won't release them without a subpoena. One caveat is that this is under US law. Banks which maintain branches in multiple countries must, of course, comply with all local laws in the jurisdiction where they do business. The take away from this is that Bank of America is unlikely to report a single deposit of $75,000 into your account to anyone on their own. If it is a paper check being deposited they will probably place a hold on it to make sure it clears, but that is all."]

I want to invest in Gold. Where do I go and buy it?

['Without getting into whether you should invest in Gold or Not ... 1.Where do I go and make this purchase. I would like to get the best possible price. If you are talking about Physical Gold then Banks, Leading Jewelry store in your city. Other options are buying Gold Mutual Fund or ETF from leading fund houses. 2.How do I assure myself of quality. Is there some certificate of quality/purity? This is mostly on trust. Generally Banks and leading Jewelry stores will not sell of inferior purity. There are certain branded stores that give you certificate of authenticity 3.When I do choose to sell this commodity, when and where will I get the best cost? If you are talking about selling physical gold, Jewelry store is the only place. Banks do not buy back the gold they sold you. Jewelry stores will buy back any gold, however note there is a buy price and sell price. So if you buy 10 g and sell it back immediately you will not get the same price. If you have purchased Mutual Funds / ETF you can sell in the market.', '"I do not know anything about retail investing in India, since I am in the US. However, there are a couple of general things to keep in mind about gold that should be largely independent of country. First, gold is not an investment. Aside from a few industrial uses, it has no productive value. It is, at best, a hedge against inflation, since many people feel more comfortable with what they consider ""real"" money that is not subject to what seems to be arbitrary creation by central banks. Second, buying tiny amounts of gold as coin or bullion from a retail dealer will always involve a fairly significant spread from the commodity spot price. The spot price only applies to large transactions. Retail dealers have costs of doing business that necessitate these fees in order for them to make a profit. You must also consider the costs of storing your gold in a way that mitigates the risk of theft. (The comment by NL7 is on this point. It appeared while I was typing this answer.) You might find this Planet Money piece instructive on the process, costs, and risks of buying gold bullion (in the US). If you feel that you must own gold as an inflation hedge, and it is possible for residents of India, you would be best off with some kind of gold fund that tracks the price of bullion."', 'You can buy from any of the well known jewelry shops. Or you can even buy it from banks. For a 24carat gold purchase, you would normally also get a certificate attesting the quality of the gold item. Also while selling your gold, you can sell to above mentioned jewellers or any decent jeweller as a matter of fact.']

Why are credit cards preferred in the US?

["There are several reasons why credit cards are popular in the US: On the other hand, debit cards do not have any of these going for them. A debit card doesn't make much money for the bank unless you overdraw or something, so banks don't have incentive to push you to use them as much. As a result they don't offer rewards other benefits. Some people say the ability to spend more than you have is a downside of a credit card. But it's really an upside. The behavior of doing that when it isn't needed is bad, but that's not the card's fault, it's the users'. You can get a credit card with a very small limit if this is an issue for you. The question I find interesting is why debit cards are more popular in your home country. I can't think of any advantage they offer besides free cash back. But most people in the US don't use cash much either. I have to think in your home country the banks have a different revenue model or perhaps your country isn't as eager to offer tons of easy credit to everyone as the US is.", "For me, it is mostly for the fraud protection. If I have a debit card and someone makes a fraudulent charge the money is removed from my bank account. From my understanding, I can then file a fraud complaint with the bank to recover my money. However, for some period of time, the money is missing from my bank account. I've heard conflicting stories of money being returned quickly while the complaint is undergoing investigation as well as money being tied up for several days/weeks. It may depend on the bank. With a credit card, it is the banks money that is tied up.", '"There are two things I can think of that might be different in other countries: Until 2013, American Express, Visa and MasterCard prevented businesses from charging extra for credit card usage, and credit card surcharges still illegal in several states. Since credit card companies add a surcharge to credit card purchases, and merchants can\'t pass that onto credit card users, they just make everyone pay extra instead. Since everyone gets charged the credit card surcharge, you might as well use a credit card and recoup some of that via ""rewards"" points. Almost all credit cards here have grace periods, where you won\'t be charged interest if you pay back your loans in full within some period of time (at least 21 days). This makes credit cards attractive to people who don\'t need a loan, but like the convenience that credit cards provide (not carrying cash, extra insurance, better fraud protection). Apparently grace periods aren\'t required by law here, so this might be common in other countries as well."', 'Your question is based on a false premise. Debit cards are more popular in the US than credit cards are. Indeed it seems to be the non-US part of the world that is big in credit cards. See here for example', '"Personally, I use my credit cards for everything because I get reward points (or, cash back, depending on the card), and I build credit history. I\'ve had credit cards since I was 18 (now 22), and my credit score is in the higher end 700s which I\'m told is pretty good for my age. Additionally, since I put my rent and large purchases on my credit card, I have a lot of reward points. I use these to buy things I wouldn\'t normally buy to try them out and see if they bring any value into my life. If not, I didn\'t really lose anything, but I have found value in some of those things. I realize most of this is gamification and consumerism at play, but getting that extra little thing once in a while for ""free"" which is pretty nice."', '', '"The real reason credit cards are so popular in the US is that Americans are lazy and broke, and the credit card companies know how to market to that. Have you ever heard of the $30k millionaires? These were individuals that purchased as if they were some of the wealthy elite, but had no real money to back it up. American society has pushed the idea of ""living on credit"" for quite some time now. An idea that is even furthered by watching the US government operate solely on credit. (Raise the debt ceiling much?) Live in America for more than six months and you will be bombarded with ""Pre-Approved Deals"" with low introductory rates that are designed to sucker the average consumer into opening multiple accounts that they don\'t need. Then, they try and get you to carry a balance by allowing low minimum payments that could take in the neighborhood of 20 years to pay off, depending on carried balance. This in turn pads the credit companies\' pockets with all of the interest you now pay on the account. The few truly wealthy Americans do not purchase on credit."', "Credit card fraud protection (by law), credit card cash back programs (provided by most CC issuers), and debit card fees (commonly imposed by the merchant). The crux is that with CC transactions, a small percentage is remitted to the issuing bank. Since the banks are already making money hand over fist on CC's, they incentivize people to use them. CC security is also lax because the merchant is responsible for fraudulent charges instead of the bank. If the merchant fails to check a signature, they are held liable for all charges if the card holder reports a fraudulent transaction."]

Does it make sense to take out student loans to start an IRA?

['Depending on the student loan, this may be improper usage of the funds. I know the federal loans I received years ago were to be used for education related expenses only. I would imagine most, if not all, student loans would have the same restrictions. Bonus Answer: You must have earned income to contribute to an IRA (e.g. money received from working (see IRS Publication 590 for details)). So, if your earmarked money is coming from savings only, then you would not be eligible to contribute. As far as whether you can designate student loans for the educational expenses and then used earned income for an IRA I would imagine that is fine. However, I have not found any documentation to support my assumption.', '"IRA contributions are limited; you cannot ""dump the excess into a retirement account like an IRA"" if the excess is more than $5500. Furthermore, as @firefly points out, you need to have earned income (technical term is compensation and it includes self-employment income, not just wages) to contribute to an IRA, and the limit mentioned above is actually the lesser of your earned income and $5500. (There are other limitations for people with high gross income, but these likely will not affect you) On the positive side, if your earned income is small, you can contribute your entire taxable earned income including the money withheld by your employer for Social Security and Medicare tax and Federal, State and local income taxes to an IRA, not just your take-home pay. For example, if your earned income is $5500 and take-home pay after tax withholding is $5000, you are still entitled to contribute $5500. So, where do you get that withheld money from so that it can be put into your IRA? Well, it can come from the student loan or interest earned from a bank or from the dividends and capital gains on your investments, etc. Money is fungible; it is not the case that only the cash received (or deposited into your bank account) as your take-home pay can be contributed. Subject to other limitations mentioned, your earned income can be contributed, not just your take-home pay."', 'I will split my answer in a few sections... Note: I will not address the legal aspect of the question. If you can or not use Federal money to invest. 1st - Investments with Student Loan 2nd - IRA as the Instrument I hope this helps!', '"I\'d check the terms of the student loan. It\'s been a long time since I had a student loan, but when I did it had restrictions that it could only be used for educational expenses, which they pretty clear spelled out meant tuition, books, lab fees, I think some provision for living expenses. If your student loan is subsidized by the government, they\'re not going to let you use it to start a business or go on vacation ... nor are they likely to let you invest it. Even if it is legal and within the terms of the contract, borrowing money to invest is very risky. What if you invest in the stock market, and then the stock market goes down? You may find you don\'t have the money to make the payments on the loan. People do this sort of thing all the time -- that\'s what ""buying on margin"" is all about. And some of them lose a bundle and get in real trouble."']

Are index trackers subject to insolvency risk?

["The Financial Services Compensation Scheme says: Investments FSCS provides protection if an authorised investment firm is unable to pay claims against it. For example: for loss arising from bad investment advice, poor investment management or misrepresentation; when an authorised investment firm goes out of business and cannot return investments or money. Investments covered include: stocks and shares; unit trusts; futures and options; personal pension plans and long-term investments such as mortgage endowments. An index-tracking fund provided by an authorised investment firm would seem to qualify in the cases where: The critical points here then are: I can't find anything easily to hand about FSCS on Blackrock's website, so I would imagine that you'd need to consult the documentation on your investment product to be sure."]

Confused about employee stock options: How do I afford these?

['ISOs (incentive stock options) can be closed out in a cashless transaction. Say the first round vests, 25,000 shares. The stock is worth $7 but your option is to buy at $5 as you say. The broker executes and sells, you get $50,000, with no up front money. Edit based on comment below - you know they vest over 4 years, but how long before they expire? It stands to reason the longer you are able to hold them, the better a chance the company succeeds, and the price rises. The article Understanding employer-granted stock options (PDF) offers a nice discussion of different scenarios supporting my answer.', "I've been offered a package that includes 100k stock options at 5 dollars a share. They vest over 4 years at 25% a year. Does this mean that at the end of the first year, I'm supposed to pay for 25,000 shares? Wouldn't this cost me 125,000 dollars? I don't have this kind of money. At the end of the first year, you will generally have the option to pay for the shares. Yes, this means you have to use your own money. You generally dont have to buy ANY until the whole option vests, after 4 years in your case, at which point you either buy, or you are considered 'vested' (you have equity in the company without buying) or the option expires worthless, with you losing your window to buy into the company. This gives you plenty of opportunity to evaluate the company's growth prospects and viability over this time. Regarding options expiration the contract can have an arbitrarily long expiration date, like 17 years. You not having the money or not isn't a consideration in this matter. Negotiate a higher salary instead. I've told several companies that I don't want their equity despite my interest in their business model and product. YMMV. Also, options can come with tax consequences, or none at all. its not a raw deal but you need to be able to look at it objectively.", '', "Stock options represent an option to buy a share at a given price. What you have been offered is the option to buy the company share at a given price ($5) starting a given date (your golden handcuffs aka vesting schedule). If the company's value doubles in 1 year and the shares are liquid (i.e. you can sell them) then you've just made $125k of profit. If the company's value has gone to zero in 1 year then you've lost nothing other than your hopes of getting rich. As others have mentioned, the mechanics of exercising the option and selling the shares can typically be accomplished without any cash involved. The broker will do both in a single transaction and use the proceeds of the sale to pay the cost of buying the shares. You should always at least cover the taxable portion of the transaction and typically the broker will withhold that tax anyways. Otherwise you could find yourself in a position where you have actually lost money due to tax being owed while the shares decline in value below that tax. You don't have to worry about that right now. Again as people have mentioned options will typically expire 10 years from vesting or 90 days from leaving your employment with the company. I'm sure there are some variations on the theme. Make sure you ask and all this should be part of some written contract. I'm sure you can ask to see it if you wish. Also typical is that stock option grants have to be approved by the board which is normally a technicality. Some general advice:", "the short answer is: No. you do not HAVE to pay $125,000.00 at the end of your first year. that is only the amount IF you decide to exercise. *fine print: But if you leave or get let go (which happens quite frequently at top tier Silicon Valley firms), you lose anything that you don't exercise. you're basically chained by a pair of golden handcuffs. in other words, you're stuck with the company until a liquidation event such as IPO or secondary market selling (you can expect to spend a few years before getting anything out of your stocks) Now, it's hard to say whether or not to exercise at that time, especially given we don't know the details of the company. you only should exercise if you foresee your quitting, anticipate getting fired, AND you strongly feel that stock price will keep going up. if you're in SF bay, i believe you have 10 years until your options expire (at which point they are gone forever, but that's 10 years and usually companies IPO well within 7 years). i would recommend you get a very good tax advisor (someone that understands AMT and stock options tax loopholes/rules like the back of their hand). I'm going to take a long shot and assume that you got an amazing offer and that you got a massive amount of ISOs from them. so i'll give this as an advice - first, congrats on owning a lot on paper today if you're still there. you chose to be an early employee at a good tech company. However, you should be more worried about AMT (alternative min tax). you will get enslaved by the IRS if you exercise your shares and can't pay the AMT. suppose, in your fictional scenario, your stock options increase 2x, on paper. you now own $1 Mil in options. but you would be paying $280000 in taxes if you chose to exercise them right now. Now, unless you can sell that IMMEDIATELY on the secondary market, i would highly advise you not to exercise right now. only exercise your ISOs when you can turn around and sell them (either waiting for IPO, or if company offers secondary market approved trading)."]

When's 0% financing the least costly (best) option?

["A Lease is an entirely different way of getting a car. In two situations it makes sense, in all other scenarios it generally doesn't make sense to lease. In the case of always wanting a new car every 2 or 3 years it can make sense to lease. Of course if you drive more the allowed miles you will pay extra at the end of the lease. If you can take the monthly lease as a business expense leasing makes sense. Otherwise you want to pay cash, or get financing. Does zero percent make sense? Sometimes. The only way to make sense of the numbers is to start with your bank, have them approve of the loan first. Then armed with the maximum loan amount they will give you and the rate and the length of the loan, then visit the dealer. You have to run the numbers for your situation. It depends on your income, your other expenses, your credit score, your bank, what deal the dealership is running, how much you have for a down payment. Here is an example. For a recent loan situation I saw: 36 months, 1.49% rate, 20K loan, total interest paid: ~$466. Armed with that information can the person get a better deal at the dealership? There was only one way to find out. In that case the credit union was better. The rebate was larger than the interest paid."]

How can I find a checking account that allows for automated transfers of dynamic amounts?

['Almost any financial institution has the technical ability to do this (simply called sweeps, auto sweeps, or deposit sweeps); the issue you face is finding an institution that is willing to do it for you. I think you will have the most luck at your primary financial institution where you currently keep the majority of your banking relationship. You will have better luck at small-town banks and credit unions. The mega banks will likely not waver from their established policies. Deposit sweeps are common for business accounts. They are usually tied to a savings account, which is usually held within the same institution, however this is not a requirement. The sweep can send money to any US bank if you can provide the routing number and account number. The sweep will establish a peg balance, or floor balance, on the checking account. At the end of the day, any amount above the peg is swept into the savings account automatically. I doubt you will find what you’re asking for within an online banking system. You will likely have to go into a branch and speak with a personal banker. Explain to them you want to establish a sweep on your checking account and want to send the funds to another financial institution. You will have better luck asking for a peg of $100, or some other small amount. They may not take your request seriously if you want to completely empty the checking account to zero.']

How do third-party banks issue car loans?

["I have gotten a letter of credit from my credit union stating the maximum amount I can finance. Of course I don't show the dealer the letter until after we have finalized the deal. I Then return in 3 business days with a cashiers check for the purchase price. In one case since the letter was for an amount greater then the purchase price I was able drive the car off the lot without having to make a deposit. In another case they insisted on a $100 deposit before I drove the car off the lot. I have also had them insist on me applying for their in-house loan, which was cancelled when I returned with the cashiers check. The procedure was similar regardless If I was getting a loan from the credit union, or paying for the car without the use of a loan. The letter didn't say how much was loan, and how much was my money. Unless you know the exact amount, including all taxes and fees,in advance you can't get a check in advance. If you are using a loan the bank/credit Union will want the car title in their name.", "I have had it two way now: I got pre-approval from my credit union which just so happened to be one of the bigger vehicle lenders in the metro area. What I found out was that the dealership (which was one of the bigger ones in the metro area) had a computer system that looked up my deal with the credit union. Basically, I signed some contracts and the CU and the dealership did whatever paperwork they needed to without me. I bought a used car and drove it off of the lot that night, and I didn't ever go back (for anything financial) Both my wife and her sister received blank checks that were valid up to a certain amount. In the case of my sister in law, she signed the check, the dealership called to confirm funds and she drove off. In the case of my wife, she ended up negotiating a better deal with dealer finance, but I was assured she only had to sign the check, get it verified and drive the car home."]

Ordering From UK to Base Overseas - VAT exempt?

["If you are an UK citizen and resident, then no. If you are an EU resident or non-EU resident then yes, but there are conditions. Source You can sometimes get VAT refunds on goods bought in the UK if you: You can’t get a VAT refund for: As bringing a laptop PCSpecialist is an online sale(I bought my desktop from them), I don't think you can claim VAT."]

Bait-and-switch on new car lease

["Within some limitations, the dealer is allowed to approve or deny lending to anyone that it chooses. Those constraints are the basics that you'd expect for any regulation in the US: Race Religion Nationality Sex Marital Status Age Source of income You can read more about them in this leaflet from the FDIC's Fair Lending Laws office. (Link is a pdf download.) As far as what to do in your mother's case, it sounds like it may be some slightly shady sales tactics, but it isn't entirely illegal... It's just annoying. One thing you could do to try to head off some of the crazy bait-and-switch sales tactics is to communicate with a handful of dealerships in your area about the specifics of your mother's profile as a purchaser. It's much harder to give someone the run-around if you have already agreed to something in principle by email.", '"I strongly discourage leasing (or loans, but at least you own the car at the end of it) in any situation. it\'s just a bad deal, but that doesn\'t answer your question. Most new cars are ""loss leaders"" for dealerships. It\'s too easy to know what their costs are these days, so they make most of their money though financing. They might make a less than $500 on the sale of a new car, but if it\'s financed though them then they might get $2,000 - $4,000 commission/sale on the financing contract. Yes, it is possible and entirely likely that the advertised rate will only go to the best qualified lessees (possibly with a credit score about 750 or 800 or so other high number, for example). If the lessee meets the requirements then they won\'t deny you, they really want your business, but it is more likely to start the process and do all the paperwork for them to come back and say, ""Well, you don\'t qualify for the $99/month leasing program, but we can offer you the $199/month lease."" (since that\'s the price you\'re giving from other dealerships). From there you just need to negotiate again. Note: Make sure you always do your research and negotiate the price of the car before talking about financing."']

Why do cash back credit cards give a higher rate for dining and gasoline purchases?

["These two categories ensure you will carry the card in your wallet (since they only work for physical locations), but don't tend to have excessive spending (most people maxing out at $200 or so per month, so $2 for the bonus). You then use the same card for other purchases, because you have it on you, where you only get the 1%. It worked for me, I started carrying the Amazon card when I found out it had a higher percentage for gas purchases. I only use it for gas though.", 'I am not sure but probably it depends upon the cut the credit card company receives from the merchant. For Hotels such as dining etc. the cut could be more. Again, periodically, many merchants join with the card company to launch promotions. It could be part of such promotions. Apart from class of merchants, these points also differ on class of cards e.g a premium card will earn more rewards than a simple classic card.', "Don't really know but I can guess. Firstly, everyone thinks the price of gas is too high. You drive to work every day, and gas is basically the only product who's price is advertised from the street! From that perspective. So mentally, I argue, we overvalue an extra 1 percent discount on gas. It's only worth maybe 60 cents a month to me, but worth a lot of other interchance fees for the credit card company. Secondly, gas stations are a prime robbery target. Credit cards mean less cash in the till. And less chance for employees to steal from the till, and less chance of counterfit money. Finally, it's a competitive market. If stations don't accept a card, they'll lose business to elsewhere. There's a gas station on either side of an intersection, and you can always tell which station is a few cents cheaper because it's the one with customers fueling up while the other one is a ghost town. They feel they have to compete on convenience or go under, and the credit card companies recruit you into the game with higher cash back rewards."]

Does Edmunds get a kick-back from the use of Edmunds Price Promise?

["Yes, Edmunds gets money from the dealerships in this program. According to this USA Today article from 2013, dealers pay Edmunds a monthly fee to participate in the program. This contrasts with TrueCar.com, a similar service, where dealers pay a fee for each sale. And yes, it is certainly possible to negotiate a lower price than the Edmunds Price Promise quote, if you enjoy haggling. The purpose of the program is not to get you the best price, just the easiest buying experience. From the USA Today article: Edmunds.com's price promise business model is designed to take the uncertainty out of pricing, speed up the buying process and also comes with the expectation that the customer will be given top-notch customer service. Dealers who have participated find that they are able to sell their cars for $300 to $500 more than consumers who go through the more traditional price quote request process. Customers, [Edmunds.com president and chief operating officer Seth] Berkowitz said, are willing to pay a little more than the best possible deal if they can save time, get great customer service and know they are getting a fair price."]

Is it better to buy this used car from Craigslist or from a dealership?

['"I do not think you are missing much. One thing you have right is low cost cars depreciate almost nothing. One thing you are missing is your satisfaction index. Driving a 200K car for 4 years requires a bit of motivation when your friends are driving new cars. Typically you need a larger goal to keep you focused. That might be saving money, getting out of debt, or obtaining an education. Buying a car from a private party, Craigslist is only one source, can save both parties money as the ""middle man"" is cut out. If you have the ability to do so, one can save a lot of money by doing your own brakes. The info is up on youtube, and I typically ""earn"" between 100-300/hour doing this work myself. Most of the time warranties do not pay off. At the core, they are insurance and insurance companies are in the business to make money. If your car is likely to need repairs a policy may be unattainable or very high in price."', "The 200K vehicle is likely the better deal. Get your own mechanic to check it out. If it doesn't have major issues, it will likely cost you less. Why? Because you've wisely included $6000 in expected maintenance. Yet it has the possibility of not needing more than $500 of maintenance during the 4 years you plan on owning it. It's a gamble, but you have the chance to save $5500 of that estimated cost with that vehicle. Note that you will also need to factor in tires for either vehicle, unless that is included in your maintenance estimate.", "I agree with the previous comments one thing that got brought up a while back when I was looking into purchasing a Prius was the battery replacement, someone once told me it was very expensive in the event it failed and needed to be changed, I'm not talking about the 12 volt but the big nickel metal hydride one. Another thing to factor is the gas that you will save, normally the Prius get double the gas milage of that of civic or a corolla but unless you drive a bunch of miles per day you really don't see the pay off. Also if you can pull a CarFax on the car, the 20 dollar investment is worth it because you can find out if it was in an accident or if it's a lemon! I once bought a bmw and didn't do a CarFax and later ended up finding out that the car had more owners than a taxi had customers. Also just like said above 200k car vs 100k doest always mean the 100k is better off, especially if the previous owner never services it well. Get the car checkout before you make the deal to buy.", '"You seem to be on the right track. I feel, though, that it\'s worth addressing your maintenance budget. Even if both cars described in your question are from the same model year, one has been in service 2x more; one car has been on the road, in weather, twice as much as the other. I\'m not sure what\'s being represented in the $6k of maintenance, but a whole host of systems can require maintenance or replacement at 200k+ miles. A/C compressor, all sorts of rubber parts (seals, hoses, belts, bushings), computer systems, stereo, window regulators, the list goes on. I don\'t know at what point the battery on a hybrid needs to be replaced, or what that replacement entails, but likely the battery or the hybrid recharge system will require something after 200k miles of service. I would learn more about what actual maintenance a high mileage prius can experience. To answer your question though, at this level of ""used"" I don\'t think the dealership adds anything to the equation. When you\'re buying certified pre-owned, the dealership/manufacturer relationship and warranty can be meaningful. When you\'re buying a 100k+ miles car from a random small used car lot it might as well be a stranger on craigslist..."']

Escrow Removal Fee?

['"Assume they do not overwithhold. You pay in $500/mo, and every time it hits $3000, they pay the tax. Engineers call this a sawtooth function, it looks like this. The average balance is not $3000, but close to $1500. The very simple math is $1500 * rate * years. It looks like your equation except it\'s not 58, it\'s just the years. And the question is whether you can make more than $850 on $1500 average before you sell. I wouldn\'t be so quick to plug in 29 years, as the average home ownership is 7 years, and depending, who knows if a refinance is in your future? The bottom line - How long would it take you to get a 57% return (2350/1500)? Ironically, the most responsible (and risk averse) person would say ""decades. Banks offer less than 1%."" even an 8% market return, while not guaranteed, is close to 7 years. But, if you carry 18% credit card debt, you can pay it down a bit each month and let it float back up every 6 months. Less than 4 years to break even."', "Consider that the bank of course makes money on the money in your escrow. It is nothing but a free loan you give the bank, and the official reasons why they want it are mostly BS - they want your free loan, nothing else. As a consequence, to let you out of it, they want the money they now cannot make on your money upfront, in form of a 'fee'. That explains the amount; it is right their expected loss by letting you out. Unfortunately, knowing this doesn't change your options. Either way, you will have to pay that money; either as a one-time fee, or as a continuing loss of interest. As others mentioned, you cannot calculate with 29 years, as chances are the mortgage will end earlier - by refinancing or sale. Then you are back to square one with another mandatory escrow; so paying the fee is probably not a good idea. If you are an interesting borrower for other banks, you might be able to refinance with no escrow; you can always try to negotiate this and make it a part of the contract. If they want your business, they might agree to that."]

Why is Net Asset Value (NAV) only reported by funds, but not stocks?

["The (assets - liabilities)/#shares of a company is its book value, and that number is included in their reports. It's easy for a fund to release the net asset value on a daily basis because all of its assets (stocks, bonds, and cash) are given values every day by the market. It's also necessary to have a real time value for a fund as it will be bought and sold every day. A company can't really do the same thing as it will have much more diverse assets - real estate, cars, inventory, goodwill, etc. The real time value of those assets doesn't have the same meaning as a fund; those assets are used to earn cash, while a fund's business is only to maximize its net asset value.", "Nobody tracks a single company's net assets on a daily basis, and stock prices are almost never derived directly from their assets (otherwise there would be no concept of 'growth stocks'). Stocks trade on the presumed current value of future positive cash flow, not on the value of their assets alone. Funds are totally different. They own nothing but stocks and are valued on the basis on the value of those stocks. (Commodity funds and closed funds muddy the picture somewhat, but basically a fund's only business is owning very liquid assets, not using their assets to produce wealth the way companies do.) A fund has no meaning other than the direct value of its assets. Even companies which own and exploit large assets, like resource companies, are far more complicated than funds: e.g. gold mining or oil extracting companies derive most of their value from their physical holdings, but those holdings value depends on the moving price and assumed future price of the commodity and also on the operations (efficiency of extraction etc.) Still different from a fund which only owns very liquid assets."]

Are AAA private-sector corporate bonds safer than government bonds?

['"If you are afraid of your government defaulting, then you also have reason to fear that your country\'s so-called ""AAA"" corporate bonds might not be a safe investment. When governments default, they often do things like: In these scenarios, it is not predictable whether government bonds will suffer more or less than any particular corporate bonds. You might want to diversify into precious metals, foreign currencies, and/or foreign securities. For the most security, you might want to choose investment vehicles that your government would have a hard time confiscating. Of course, you will face currency fluctuation risks if you do so."', "Haven't there been examples of governments defaulting, delaying payment and imposing haircuts on investors? Greece and Argentina come to mind. Quite a few Govt have defaulted in the past or were very of default or crisis. Most 3rd world countries or developing countries have under gone stress at some point. Greece was amongst the first example of Developed country going bankrupt. am I not better off if the fund invests solely in AAA corporate bonds, avoiding government bonds? Well that depends. Corporate bonds are not safer than Government Bonds. There have been instances of Corporate bonds not giving the required returns."]

Does the profit of a company directly affect its stock or indirectly by causing people to buy or sell?

["The short answer to your question is yes. Company performance affects stock price only through investors' views. But note that selling for higher and lower prices when the company is doing well or poorly is not an arbitrary choice. A stock is a claim on the future cash flows of the firm, which ultimately come from its future profits. If the company is doing well, investors will likely expect that there will large cash flows (dividends) in the future and be willing to pay more to hold it (or require more to sell it). The price of a stock is equal what people think the future dividends are worth. If market participants started behaving irrationally, like not reacting to changes in the expected future cash flows, then arbitrageurs would make a ton of money trading against them until the situation was rectified.", "people implicity agree to sell stocks when a company does bad But, remember, when you sell the stock of a company that, in your estimation, 'did bad', someone else had to buy; otherwise, there is no sale. The someone else who bought your shares evidently disagrees with your assessment. Did you sell because the company didn't earn a profit at all? Did it not earn a profit because it's in a dead-end business that is slowly but inevitably declining to zero? Something like Sears Holdings? Or did it not make a profit because it is in an emerging market that will possibly someday become hugely profitable? Something like Tesla, Inc.? Did you sell because the company made a profit, but it was lower than expected? Did they make a lower-than-expected profit because of lower sales? Why were the sales lower? Is the industry declining? Was the snow too heavy to send the construction crews out? Did the company make a big investment to build a new plant that will, in a few years, yield even higher sales and profits? What are the profits year-over-year? Increasing? Declining? Usually, investors are willing to pay a premium, that is more than expected, for a stock in a company with robust growth. As you can see, the mere fact that a company reported a profit is only one of many factors that determine the price of the shares in the market.", '"Yes, the price of a stock is what investors think the value of a stock is, which is not tied to profits or dividends by any rigid formula. But to say that therefore the price could be high even though the company is doing very poorly is hypothetically true, but unlikely in practice. Consider any other product. There is no fixed formula for the value of a used car, either. If everyone agreed that a rusting, 20-year old car that doesn\'t run is worth $100,000, then that\'s what it would sell for. But that\'s a pretty big ""if"" at the beginning of that sentence. If the car had been used in some hit TV show 20 years ago, or if it was owned by a celebrity, or some such special case, maybe a rusting old car really would sell for $100,000. Likewise, a stock might have a price higher than what one would predict from its dividends if some rich person wanted to buy that company because the brand name brings back nostalgic memories from his youth and so he drives the price up, etc. But the normal case is that, in the long term, the price of a stock tends to settle on a value proportional to the dividends that it pays. Or rather, and this is a big caveat, the dividends that investors expect it to pay in the future. And then adjusted for all sorts of other factors and special situations, like the value of the company if it was to be liquidated, etc."']

How can I avoid international wire fees or currency transfer fees?

["Be aware that ATM withdrawals often generate hidden fees, which are not obviously declared. Many banks operate e.g. with a currency exchange fee, giving you an exchange rate some 1-2% lower than actually applicable. If you withdraw larger amounts, such a currency exchange fee easily adds up to what you would have paid for a wire transfer, where you would get a better exchange rate. Although it's probably much hassle for you to change banks, another option may be to find a bank which operates both in France and the US. Banks with different national branches often offer cheap and fast wire transfers between same-bank accounts in different countries. E.g. Citibank used to offer such services, but I am not sure if they still serve private customers in France.", "I faced something similar for travel or work reasons, and as for me I preferred wire transfer over credit card withdrawals because my bank has huge fees. My thoughts so far are: the fee can vary a lot for credit card. As for me, I can expect 5% fees on foreign withdrawals. But I considered changing bank and I think a Gold (or premium) card might be a good idea as well. The idea is you pay a big subscription (100 euros or so) but have no fee. The total of withdrawal fees could easily (if you stay long abroad) reach this amount. There are also banks like HSBC that offer low fees on withdrawals abroad, you can ask them. The problem is that you cannot really withdraw huge amounts to lower the fee (since you carry this cash in the street). for wire transfers the total fee is usually $50 or more (I had a fee from distant bank, a fee for change and a fee in my home bank). But the amount is unlimited (or high enough to be of little matter) and I needed to do this once per year or so. So I guess it could be interesting if you have enough savings to only transfer money every couple of months or so. I think Western Union is also involved this profitable business. I never used it because the fees are pretty high, but maybe it is useful for not too big amounts frequently transfered. Actually, have you considered a loan? It's a very random idea but maybe you can use a loan as a swap and then transfer money when you have enough to reimburse it all. But the question is very interesting, I think the business is pretty huge due to globalization. It is expensive because some people can make a lot of money out of it.", "Several possibilities come to mind: Several online currency-exchange brokers (such as xe.com and HiFx) offer very good exchange rates and no wire transfer fees (beyond what your own bank might charge you). Get French and American accounts at banks that are part of the Global ATM alliance: BNP Paribas in France and Bank of America in the USA. This will eliminate the ATM fee. Get an account at a bank that has branches in both countries. I've used HSBC for this purpose.", "One way is to wire transfer large amounts. If you transfer $5,000 at one go, that $50 fee works out to 1%, same as the $5 on a $500 ATM withdrawal (and ATM fees, hidden and explicit, tend to be higher than $5). The downside is exchange rate risk (taking more money at one go exposes you to that day's rate, good or bad, vs taking it in multiple chunks). If you're American, you also have to report large transfers and foreign balances on your taxes. Shopping around for a good home bank (with low wire & foreign ATM fees), is quite important.", "I did some empirical research, comparing the exchange rates for wire transfers vs. the exchange rates for ATM withdrawals. With my bank, wire transfers typically take a 4% float off the exchange rate. ATM withdrawals seem to take just over 2%. And ATM withdrawals don't have a wire transfer fee, as long as I'm withdrawing from a branch of the same bank (overseas). The only problem with ATM withdrawals is the daily limit. As far as I can see, Tor's answer above has it completely backwards, at least with my bank, ATM withdrawals are a much better value. Do the research yourself...call the bank you're going to transfer from and find out what their current exchange rate is. Compare it to the current spot rate (e.g. XE.com) to determine how much of a cut the bank is taking. Then, if you can, withdraw some cash from the foreign location with your ATM card and see how much of the original currency is deducted from your account. In this way you can empirically discover for yourself the better rate.", 'My preferred method of doing this is to get a bank draft from the US in Euros and then pay it into the French bank (my countries are Canada and UK, but the principle is the same). The cost of the bank draft is about $8, so very little more than the ATM method. If you use bigger amounts it can be less overall cost. The disadvantage is that a bank draft takes a week or so to write and a few days to clear. So you would have to plan ahead. I would keep enough money in the French account for one visit, and top it up with a new bank draft every visit or two.', 'Check global ATM alliance they are banks that use reciprocal benefits on each other in other countries without fees. For example the in the USA Bank of America and In France it is BNP Paribas. Both are banks in this alliance. I use this option between the United States and the Caribbean my banks of choice are Bank of America in the US and in the Caribbean I use Scotia Bankand since I have accounts in both weekends I can use both ATM cards on any of these two banks without any processing fees!!!! You should check the global ATM alliance to see if it is an option that you could use.', "Depending on your income/savings level and who you work for (if you work for a big company check with an HSBC Premier advisor, they may waive the requirements), you may qualify for an HSBC Premier account, which can allow you to open accounts in different countries and transfer money between them without a fee. You can also get a Premier account without meeting the requirements if you are willing to pay a monthly fee, but I doubt that will be worth it in the long run for what you need (worth doing the math though if you travel frequently). NOTE: There may be similar offerings from other banks, but this is just the only one I'm aware of.", "I haven't seen this answer, and I do not know the legality of it, as it could raise red flags as to money laundering, but about the only way to get around the exchange rate spreads and fees is to enter into transactions with a private acquaintance who has Euros and needs Dollars. The problem here is that you are taking on the settlement risk in the sense that you have to trust that they will deposit the euros into your French account when you deposit dollars into their US account. If you work this out with a relative or very close friend, then the risk should be minimal, however a more casual acquaintance may be more apt to walk away from the transaction and disappear with your Euros and your Dollars. Really the only other option would be to be compensated for services rendered in Euros, but that would have tax implications and the fees of an international tax attorney would probably outstrip any savings from Forex spreads and fees not paid.", "I think the one single answer is that the answer depends on the two countries involved and their banks' practices. To find that answer, you need to ask other expats from your country living in France and ask them for their experience. Note that most expats do not know what fees they are paying. For example, in the Philippines, the lowest fee charged still involves waiting 30 days to get your money. Specifically, I opened a US dollar savings account with the minimum of US $500 required (other rules are involved for opening a bank account), deposited a personal check drawn on my US bank account (no fee charged), and waited 30 calendar days to withdraw USD bills. The Philippines bank did not have a branch in the US, but had financial arrangements with US banks. After getting USD dollars in my hand, I walked to a nearby exchange business store (which usually offered a better daily rate than a bank, but a rate between the banks' buy and sell rates) and exchange the dollars for pesos. Note that years ago, banks did not give USD bills, when dollars were scarce in the Philippines. However, this process does not work in Thailand, due to bank rules against private individuals opening a USD account, with exceptions. And there are still fees involved. March 2017"]

Do I not have a credit score?

["Generally, if you have a loan, you have a credit score. But since you have never had a loan before, then it is likely that you do not have a credit score. You should not be worried if you aren't planning on applying for credit and/or loans. If you are wanting to purchase a house, car, or even just having a credit card, you should work on obtaining a secure loan so then you can establish history. Most of the time you have to pay to view your credit score. By law, you can obtain a free copy of your credit report, which it sounds like you have at annualcreditreport.com, which only shows your payment history, but in order to view your credit score, you generally have to pay for it.", '"You can\'t get your credit score for free, just the report with the information the score is based on. If you got credit reports through annualcreditreport.com, the Score tab would typically contain an advertisement for purchasing your score. If you have an ad-blocker enabled, that might be blocked, explaining the blank page. Try turning off any browser extensions that alter how pages are shown. The accounts page/tab/section should show something like ""0 open accounts"" or similar, to indicate that it is loading data. Your lack of credit history probably does mean you don\'t have a credit score, so it\'s probably not worth paying anything to find that out. The focus should be on the accuracy of the underlying report, since you can do something about that. Should I be worried? I\'d say no on that. You\'ll have an easier time getting credit (and better terms) in the future if you start now with some account, even if it\'s a secured credit card you don\'t use much, because the age of the oldest and average accounts are factors in credit scoring models."', "I'm the contrarian in the crowd. I think credit scores and debt are the closest thing to evil incarnate. You're in good company. The absence of a credit score simply means the agencies have insufficient data in their behavioral model to determine how profitable your business would be to the bank. The higher your score, the more likely the bank is to make a profit from your loan. IMHO, you're better off building up cash and investment reserves than a credit history. With sufficient reserves, you will be able to shop around for a bank that will give you a good rate, if you ever do need a loan. You'll be surprised at how quickly you get in a position where you don't need a loan if you save and invest wisely. I used to have a (high) credit score, and I was miserable about it because there were always bills due. I gave up debt 14 years ago, paid the last debt 7 years ago, and have never. been happier. Raising kids without debt (or credit score) is much more fun than with debt."]

US sanctions against foreign citizens

['"Are most big US based financial institutions and banks in such a close relationship with USCIS (United States Citizenship And Immigration Services) so they can easily request the information about market traders? Yes. They must be in order to enforce the laws required by the sanctions. What online broker would you suggest that probably won\'t focus on that dual citizenship matter? ""Dual"" citizenship isn\'t actually relevant here. Nearly anyone in the world can invest in US banks except for those few countries that the US has imposed sanctions against. Since you are a citizen of one of those countries, you are ineligible to participate. The fact that you are also a US citizen isn\'t relevant in this case. I believe the reasoning behind this is that the US doesn\'t encourage dual citizenship: The U.S. Government does not encourage dual nationality. While recognizing the existence of dual nationality and permitting Americans to have other nationalities, the U.S. Government also recognizes the problems which it may cause. Claims of other countries upon U.S. dual-nationals often place them in situations where their obligations to one country are in conflict with the laws of the other. In addition, their dual nationality may hamper efforts of the U.S. Government to provide consular protection to them when they are abroad, especially when they are in the country of their second nationality. If I had to guess, I\'d say the thinking there is that if you (and enough other people that are citizens of that country) want to participate in something in the US that sanctions forbid, you (collectively) could try to persuade that country\'s government to change its actions so that the sanctions are lifted. Alternatively, you could renounce your citizenship in the other country. Either of those actions would help further the cause that the US perceives to be correct. What it basically boils down to is that even though you are a US citizen, your rights can be limited due to having another citizenship in a country that is not favorable in the current political climate. Thus there are pros and cons to having dual citizenship."', '"US Sanctions are usually very nuanced and you should look them up yourself. It may be widely reported that ""US sanctions X-country"" and it may be widely understood that it means all funds from anybody in that country are blocked, that USUALLY isn\'t the case (or ""many times"" isn\'t the case, I\'m not going to bother quantifying that) Many times it is a comprehensive list of certain individuals and businesses that are blocked. The US Treasury publishes a list of these organizations. This misinterpretation can trickle down to companies. You would think big financial companies understand regulations, but they typically just react to how things are reported and have no uniform understanding of the financial regulations they are subject to. Private companies create unique and arbitrary company policies in reaction to the spirit of a regulation. So could it be that all Iranians cannot interact with the US financial system? Sure, thats possible. Could it be a lot more nuanced? Sure. Does it matter if the broker will actually investigate your SSN with USCIS? Maybe, maybe not. Does it matter if you disclose you are a dual citizen if they claim they can just check your SSN? The financial institution is the one liable for misinterpreting sanctions. Let the consequences guide your actions."']

How to refuse a Clearxchange payment?

['"Your bank uses ClearXchange, not you. It is not a website where you open an account, like many others, but an inter-bank transfer system based on email addresses, kind of like free wire transfers between everyone. You don\'t have to set anything up, just accept the payment, and the money appears in your account (assuming the client used the email address your bank has on file for you). However, if you still don\'t want it, you can just ignore it. There is a timeout when his transaction gets auto-cancelled, and he gets his money back. Here is an example text from the \'fine print\' (my highlighting): ""[...]We will continue our attempts by sending a second notice of a transfer to the recipient, and providing the recipient a period of nine (9) succeeding Business Days to register in the Service, or the person-to-person payment service of clearXchange, Zelle or a Network Bank. At the end of this period, if the recipient still has not registered, the transfer request will be Cancelled. The sender may cancel the transfer at any time during this ten (10) day period if the recipient is not registered at the time of cancellation.[...]"" (https://chaseonline.chase.com/Public/Misc/LAContent.aspx?agreementKey=chasenet_la)"']

Is it correct to call an exchange-traded note a type of ETF?

["They're exchange traded debt, basically, not funds. E.g. from the NYSE: An exchange-traded note (ETN) is a senior unsecured debt obligation designed to track the total return of an underlying market index or other benchmark, minus investor fees. Whereas an ETF, in some way or another, is an equity product - which doesn't mean that they can only expose you to equity, but that they themselves are a company that you buy shares in. FCOR for example is a bond ETF, basically a company whose sole purpose is to own a basket of bonds. Contrast that to DTYS, a bear Treasury ETN, which is described as The ETNs are unsecured debt obligations of the issuer, Barclays Bank PLC, and are not, either directly or indirectly, an obligation of or guaranteed by any third party. Also from Barclays site: Because the iPath ETNs are debt securities, they do not have any voting rights. FCOR on the other hand is some sort of company owned/managed by a Fidelity trust, though my EDGAR skills are rusty. AGREEMENT made this 18th day of September, 2014, by and between Fidelity Merrimack Street Trust, a Massachusetts business trust which may issue one or more series of shares of beneficial interest (hereinafter called the \x93Trust\x94), on behalf of Fidelity Corporate Bond ETF (hereinafter called the \x93Fund\x94), and Fidelity Investments Money Management, Inc., a New Hampshire corporation (hereinafter called the \x93Adviser\x94) as set forth in its entirety below."]

Why are banks providing credit scores for free?

["I think the biggest reason is price; it's a lot cheaper now than it was to offer these. That's because for the most part, when you get a credit score for free, you're not getting a true FICO score. You're getting instead a VantageScore. VantageScore was created by the three credit bureaus, and as such they can offer it without paying Fair Isaac a licensing fee. That makes it a lot cheaper to offer, and while it's not absolutely identical to FICO (or more accurately to any of the FICO provided scores) it's close enough for most peoples' purpose. And of course undoubtedly Fair Isaac has some price pressure on their side now that Vantage is big enough that many people see them as fungible. As such they've had to make it easier, or they'd lose business - no longer being a monopolist. The other relevant piece here is that probably in many of these cases they're really just offering you what Experian would give you directly - so it's just a cross-marketing thing (where Experian, or perhaps another bureau, gets access to you as a customer so they can up-sell you ID theft insurance and whatnot, while the bank gets to offer the free score).", '"Why are banks all of a sudden providing people their credit scores for free? Because it is a really good idea. On an ABC Bank website, it has: ""Check your credit score for free"" button. You click it. Not only will it come up with a credit score, but it could also trigger a marketing workflow. If it is direct mail, email, or a phone call a banker could contact you for help with a debt product. This marketing could also be targeted, say a person with a high score could be targeted for a mortgage. A person with a low or medium score could be targeted for ways and products to improve their score. Now if you run XYZ bank and not do the same, you are losing a competitive advantage to banks that offer this. Not only will your customers be less happy, but you will lose a great marketing opportunities. Face it, the only people that worry about their credit score are people that are in the market to borrow. Which again, is more information. If you have someone that never checks their credit score, or has their credit frozen, then it is wise not to market to them debt products."', "Two possible reasons: You can tell which scenario it is based on the credit history they provide you. If you look at the history and they show you your scores for each month, even though you didn't initiate it, then they are auto checking it each month. If the historical dates are only on the dates you clicked on the button, they are only checking when you manually click on it. As for the why they provide it, a few years back it was a desirable feature. Now they all do it just to keep pace with everyone else. Note that most banks only provide a single scoring model from one bureau (but different banks use different bureaus).", '"It\'s the inevitable result of the Fair, Isaac Company deciding to sell access to credit scores to the general public: some marketing dude at one of the banks thought, ""Wouldn\'t it be a great idea if we could use \'free\' access to FICO scores as a differentiator for our CCs?"" And, because most humans play follow the leader, soon enough, other banks were paying FICO a license to present FICO scores to their card holders."', '"An alternative take on the ""why"" is that most people\'s credit is better than they think, and all of these banks offer credit products. Put a ""good credit"" badge next to an ad for a shiny new card or auto refi, and it\'s just good business."']

Should I keep most of my banking, credit, and investment accounts at the same bank?

["http://www.fdic.gov/deposit/deposits/index.html FDIC currently insures up to $250,000. (I would have put that as a comment to Jeffery but it says it was locked.) You don't want to put all your eggs in one basket. If you shop around, and keep shopping all the time you can keep your accounts in a single place so long as that single place provides the best deal. Don't have any loyalty to your banking institutions because they don't have any loyalty to you. Also, having lots of accounts means you are familiar with lots of institutions, so you are likely better at shopping around. Things I consider. For fewer institutions: For more institutions:", '"For personal accounts, I can\'t imagine that this is too much of a problem. The only concern that I can think of (for American banks) is that FDIC only insures you up to $100,000 if the bank were to go belly-up. If you\'re getting over that amount of money, you may want to ""diversify"" a little more."', "Here's my answer for what it's worth:", "I've had all my account with the same bank for all my life. Generally, the disadvantage is that if I want some kind of product like a credit extension or a mortgage, I have the one bank to go to and if they don't want to help me I'm out of luck. However, occasionally there are also perks like the bank spontaneously offering you increased credit or even a whole line of credit. They can do this because they have your whole history and trust you."]

Insurance broker - Online vs. physical location?

['"Traditional insurance agent guy here. There is no right answer in my opinion because your individual needs cannot be generalized. There are a variety of factors that influence the price charged to you including but not limited to your past claims history, geographic location, credit profile, and the carrier\'s book of business itself. This is just a small sampling, in reality their pricing calculations may be far more complicated. The point is there is no one-size-fits all carrier. My agency works with 15 different carriers. Sometimes we can offer the best combination of coverage and cost to a prospective client that beats their existing coverage; other times we are nowhere close to being competitive. The most important thing you can do is find a person/site/company you can trust and one that does not take advantage of you. Insurance policies are complex and ""getting the best deal"" may oftentimes mean lessening coverage without realizing it. So I would recommend using whatever service channel (online, phone, local agent) that\'s most convenient and consultative for you. And otherwise, shop around once every year or two to make sure you\'re still getting the most for your money."']

Are these scenarios considered as taxable income?

['For case 1, there is no tax due as you sold the book for less than your cost basis. If you had sold for more than $100, then you would have had a profit. For case 2, that depends on the value of the gift card with respect to the value of your fare. Most likely that gift card is less than the cost of the fare. And in that case it would generally be treated as a reduction in the purchase price. The same way that rebates and cash back on credit card are treated. Note if for some reason a 1099 was generated that would change the situation and you would need to consult a tax professional. Since that would indicate that the other party to the transaction had a different view of the situation.', "You can always reduce the income by the direct expenses required to earn it, and figure out whether it is ultimately a net profit or loss. The net profit is taxable income. The loss may be tax deductible if the underlying thing is tax deductible. For the book, the $50 revenue required a $100 expense, so that's a $50 net loss. You don't owe any income tax since it's a loss. You could take the loss as a tax deduction if you have a business trading books, or if buying the book would be tax deductible for some reason. Note that in the latter case you can only deduct the $50 not the $100. For the airline ticket, it is to compensate you for the losses you took as a result if the delayed flight. So you tally up the $22 meal you had in the airport waiting for news, the $110 on the motel room you rented or forfeited, any other way you can peg a cash value to any losses you took. Total them up, again, a net loss is only deductible if the travel is already deductible. Note that if the actual expenses (book, flight) were tax deductible for some reason, the cash-back reduces the amount of your tax deduction, so it has the same effect as the sale/gift being taxable income."]

What home improvements are tax deductible?

["In general, for a home you live in, there's maintenance, which is just that, you pay to keep your house in good repair. There's also real improvements. I spend $xxx to turn my poured cement basement into living space. Here, I keep my receipts and the cost (although not my labor) is added to the basis of my home when I sell. The couple things that may offer a deduction have to do with energy. When I insulated my basement, there was a state tax credit which I got back when I filed taxes. There are also credits for installing solar panels. What you've described in your question just sounds like one of the small joys of home ownership.", 'On a personal income tax return home improvements are generally not deductible on a federal level. There might be some exceptions made for special tax programs, such as solar panels, but they tend to be the exception rather than the rule.', 'As noted above but with sources An improvement materially adds to the value of your home, considerably prolongs its useful life, or adapts it to new uses. You must add the cost of any improvements to the basis of your home. You cannot deduct these costs. Source Page 11, Adjusted Basis, Improvements Second, A repair keeps your home in an ordinary, efficient operating condition. It does not add to the value of your home or prolong its life. Repairs include repainting your home inside or outside, fixing your gutters or floors, fixing leaks or plastering, and replacing broken window panes. You cannot deduct repair costs and generally cannot add them to the basis of your home. Source Page 12, Adjusted Basis, Repairs versus improvements Generally, an expense for repairing or maintaining your rental property may be deducted if you are not required to capitalize the expense. You must capitalize any expense you pay to improve your rental property. An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use. Source Page 5, Repairs and Improvements Good Luck,', '"Home Improvements that improve the home\'s Energy Efficiency are currently eligible for federal tax credits. This includes renewable energy equipment (solar panels, etc.) and Nonbusiness Energy Property Tax Credit. The credit is 30% of the cost. From Intuit Turbo Tax: Energy Tax Credit: Equipment and materials can qualify for the Nonbusiness Energy Property Credit only if they meet technical efficiency standards set by the Department of Energy. The manufacturer can tell you whether a particular item meets those standards. For this credit, the IRS distinguishes between two kinds of upgrades. The first is ""qualified energy efficiency improvements,"" and it includes the following: •Home insulation •Exterior doors •Exterior windows and skylights •Certain roofing materials The second category is ""residential energy property costs."" It includes: •Electric heat pumps •Electric heat pump water heaters •Central air conditioning systems •Natural gas, propane or oil waterheaters •Stoves that use biomass fuel •Natural gas, propane or oil furnaces •Natural gas, propane or oil hot water boilers •Advanced circulating fans for natural gas, propane or oil furnaces"']

Receive money from US Client to Myself in India by selling services

['You can receive funds from US Client as an individual. There is no legal requirement for you to have a company. If the transactions are large say more than 20 lacs in a year, its advisable to open a Private Ltd. Although its simple opening & Registering a company [A CA or a Laywer would get one at a nominal price of Rs 5000] you can do yourself. Whatever be the case, its advisable to have seperate accounts for this business / professional service transactions. Maintain proper records of the funds received. There are certain benefits you can claim, a CA can help you. Paying taxes in Advance is your responsibility and hence make sure you keep paying every quarter as advance tax. Related questions Indian citizen working from India as freelancer for U.S.-based company. How to report the income & pay tax in India? Freelancer in India working for Swiss Company Freelancing to UK company from India How do I account for money paid to colleagues out of my professional income?', 'Depending on how tech savvy your client is you could potentially use bitcoin. There is some take of indian regulators stopping bitcoin exchanges, meaning it might be hard to get your money out in your local country but the lack of fees to transfer and not getting killed on the exchange rate every time has a huge impact, especially if your individual transaction sizes are not huge.']

Can a merchant charge you more in the US if you want to use a credit card?

['"This isn\'t so much a legal issue, the prohibition on giving discounts was written into the merchant agreements that most of the major credit card companies enforced on businesses that accepted their credit cards. That is, until the recent Financial Reform Bill (2010) passed Congress. It changes everything. (The logic on this is a little convoluted, so read carefully) Credit card companies can no longer prohibit merchants from requiring a minimum purchase amount to use a credit card. Meaning: That if merchants want to, they can now stop taking credit cards for a $4 latte. Credit card companies can no longer prohibit merchants from giving discounts for cash. Here is an article with a lot more detail: Financial Reform Bill Good News for Credit Card Holders Here is a link to the actual bill details and content: HR 4173 - Dodd-Frank Wall Street Reform and Consumer Protection Act Here is the relevant part: This subsection is supposed to take affect ""at the end of the 12-month period beginning on the date of the enactment of the Consumer Financial Protection Act of 2010."" In other words, July 21st, 2011."', "I'm not sure about the laws in specific states. However it's part of their merchant agreement that they can not charge a fee for a customer paying with credit card. It's also against merchant agreements to require a minimum purchase to use a credit card, although this is less commonly enforced. Apparently (http://fso.cpasitesolutions.com/premium/le/06_le_ic/fg/fg-merchants.html) merchants can offer a cash discount. Offering payment by credit card, though practically a requirement in todays retail environment, is a privilege for the merchant. It's a way of making buying convenient for the customer. As a result, penalizing the customer in any way is not just against their agreement, but rather disingenuous as well. edit: here's a bit more information about what they can and can't do. Amex prohibits discrimination, so if a merchant can't do something to a Visa/MC customer they can't do it to an Amex customer either. http://fso.cpasitesolutions.com/premium/le/06_le_ic/fg/fg-merchants.html"]

How do you invest in real estate without using money?

["I know this is broad, but this isn't a scam -- it's a workshop/educational thing about teaching people of investing in the real estate market, and how to profit The scam is that the free or cheap class doesn't give you enough info to make money; so they sell you a more advanced and expensive class that gets you almost enough info; but the goal of the 2nd class is to get you to pay for the specialized seminar and coaching sessions that either fail to materialize or are so basic they aren't worth the money.", "Sounds like the seminar is about using OPM (other people's money), which means you're going to have to find not just real estate, but investors. Those investors are going to need a business plan, contracts, and a lot of work from you to provide as much equity as possible before the property is sold. If you're serious about Real Estate, I suggest finding the most successful broker/agent you can, buying them a beer, glass of wine, or cup of coffee, and picking their brain about it. It'll be cheaper then a scam seminar.", "This is one way in which the scheme could work: You put your own property (home, car, piece of land) as a collateral and get a loan from a bank. You can also try to use the purchased property as security, but it may be difficult to get 100% loan-to-value. You use the money to buy a property that you expect will rise in value and/or provide rent income that is larger than the mortgage payment. Doing some renovations can help the value rise. You sell the property, pay back the loan and get the profits. If you are fast, you might be able to do this even before the first mortgage payment is due. So yeah, $0 of your own cash invested. But if the property doesn't rise in value, you may end up losing the collateral.", "They're probably talking about flipping houses. The conventional wisdom when flipping is to purchase the property with a mortgage or other loan on day-0. Do the work to rehabilitate it. Get it listed for re-sale promptly (this step has varying strategies) with a profitable price but one that will make it move. Have the house sold on or before the first payment would be due. This is anywhere from 30 to 60 days. The flipper then never has to make a payment on the mortgage or loan, the costs of rehabilitating the home are recovered promptly (potentially before any loan, credit card payments, or invoices are due), and there is a profit. This also assumes that either a 100% loan or some other mechanism is used to address closing costs and fees. This model fits the premise of the infomercial in that you make money investing in real estate but never have to tie up any of your own money in the process.", "I've\xa0been to one of these seminars: a) you can get a loan of up to $700,000 from the company and only have to pay a fixed amount for the use of money, but you have to pay the loan off in nine months. Or b) you can just invest say $50,000 and you'll get a return of say 4%. But what the company does is take all of the investor's money and use that to fund the loans (putting none of the company’s money at risk), and that fixed amout sounds reasonable until you realize that it's only for a part of the year so the real APY is actually much higher than the conventional lending rate; or the rate they are paying the investors.", "There is (almost) always money involved somewhere, but it doesn't have to come from you. It can be investors, credit cards, or even seller-financing (I've done all 3). Examples: If you can find partners with the money to make the deals happen, then your job is to put the deal together. Find the properties, negotiate the price, even get the property under contract (all without any obligation or cost on your part... yes it absolutely can be done). Then your partners will fund the deal if it's good enough and their terms are met, etc. In some areas you can put a property on a credit card. If you find a house say for $25,000 that will rent for $300/month, and you can put it on a credit card (especially at zero percent for a year or something similar), then you can generate cashflow as a landlord without putting up any cash of your own on the purchase. Of course there are many risks associated with landlording and i could tell you horror stories... but we're not addressing that here. You can negotiate a sale with an owner who agrees to finance the entire purchase for you. I once purchased 3 properties at once this way from a seller who financed the entire sale, all closing costs, everything, this way. Of course they needed a lot of repair and such so I had to fund that another way, but at least the purchase itself cost me no money out of pocket. So these infomercials/courses are not inherently scams in the sense that what they are teaching is (usually... I'm sure there are exceptions) true. However they generally give you enough information to get into trouble, and not out. But that's what true learning is... it's getting into trouble and finding a way out that doesn't kill you. =) That's called experience, and you can't buy that for any price.", '"I have a friend who had went on a seminar with FortuneBuilders (the company that has Than Merrill as CEO). He told me that one of the things taught in that seminar was how to find funding for the property that you want to flip. One of the things he mentioned was that there are so-called ""hard money"" lenders who are willing to lend you the money for the property in exchange for getting their name on the property title. Last time I checked it looked like here in Florida we had at least Bridgewell Capital and Fairview Commercial Lending that were in that business. These hard money lenders get their investment back when the house is sold. So there is some underlying expectation that the house can be sold with some profit (to reimburse both the lender and you for your work). That friend of mine did tell me that he had flipped a house once but that he did not receive the funding to that from a lender but from an in-law, however it was through a similar arrangement."']

How can I claim tax back from whilst I was working in Austria?

["I don't have any specific situation on the situation in Austria, but in general there are a few things that you should keep in mind. First of all, the official website of the Austrian tax authorities appears to be this one: https://www.bmf.gv.at/steuern/startseite-steuern.html. There is an English page there, but it is mainly aimed at international businesses. The part about tax treaties may be relevant, though. The general procedure is outlined here: https://www.bmf.gv.at/steuern/startseite-steuern.html. Like I said in my comment, most information is likely only available in German. I would strongly advise to ask help from someone who speaks German and is familiar with the tax system in Austria. The main thing that you would have to do first is to check of which country you are a resident for tax purposes. This is usually the country in which you lived for more than 183 days in the past year. If you moved during the year, and had income from more than one country, you may have to file tax returns in both countries. There are tax treaties between Austria and the UK (and most other countries), so you would have to check those treaties to find out what gets taxed where. In principle you get taxed only once, but usually you would have to declare all income. The last important thing is of course to make sure you submit before the relevant deadlines."]

Is a company allowed to give employees an option for a bonus to be paid out as a 401k match or cash?

['"This has to do with the type of plan offered: is it a 401(k) plan or a profit-sharing plan, or both? If it\'s 401(k) I believe the IRS will see this distribution as elective and count towards the employee\'s annual elective contribution limit. If it\'s profit sharing the distribution would be counted toward the employer\'s portion of the limit. However -- profit sharing plans have a formula that\'s standard across the board and applied to all employees. i.e. 3% of company profits given equally to all employees. One of the benefits of the profit sharing plans is also that you can use a vesting schedule. I\'d consult your accountant to see how this specifically impacts your business - but in the case you describe this sounds like an elective deferral choice by an employee and I don\'t see how (or why) you\'d make this decision for them. Give them the bonus and let them choose how it\'s paid out. Edit: in re-reading your question it actually sounds like you\'re wanting to setup a profit sharing type situation - but again, heed what I said above. You decide the amount of ""profit"" - but you also have to set an equation that applies across the board. There is more complication to it than this brief explanation and I\'d consult your accountant to see how it applies in your situation."', "I have worked for companies that have done this. One did have a match and the other did not. When they figured their profit at the end of the year a portion was given to the employees as a 401K deposit. retirement-topics-401k-and-profit-sharing-plan-contribution-limits Total annual contributions (annual additions) to all of your accounts in plans maintained by one employer (and any related employer) are limited. The limit applies to the total of: elective deferrals employer matching contributions employer nonelective contributions allocations of forfeitures The annual additions paid to a participant’s account cannot exceed the lesser of: 100% of the participant's compensation, or $54,000 ($60,000 including catch-up contributions) for 2017; $53,000 ($59,000 including catch-up contributions) for 2016. So as long as everything stays below that $54,000 limit you are good. In one case the decision was made by the company for the employee, the other company gave us the option of bonus check or 401K. I heard that most of the employees wanted the money in the 401K."]

What data does a seller receive when I pay by credit card?

["It depends on the seller. If the seller wants, they can collect the information from you and send it to the payment gateway. In that case, they of course have everything that you provide at some point. They are not supposed to keep the security code, and there are rules about keeping the credit card number safe. The first four digits of the credit card number often indicate the bank, although smaller banks may share. But for example a Capital One card would indicate the bank. Other sellers work through a payment gateway that collects the information. Even there, the seller may collect most of the information first and send it to the gateway. In particular, the seller may collect name, email, phone, and address information. And in general the gateway will reveal that kind of information. They will not give the seller credit card info other than the name on the card, expiration date, and possible last four digits. They may report if the address matches the card's billing address (mismatched addresses may mean fraud). Buying through someone like PayPal can provide the least information. For a digital good, PayPal can only expose the buyer's name (which may be a business name) and email (associated with the payment account). However PayPal still has the other information and may expose it under legal action (e.g. if the credit card transaction is reversed or the good sold is illegal). And even PayPal will expose the shipping address for physical goods that require shipping."]

Where can I find filings of HUD-1 statements?

['"Three companies may have copies of it: the bank, the Title Company (aka settlement company), and perhaps the real estate agent. The bank (assuming you had a mortgage) is usually the easiest one to contact, as you\'re probably still making payments to them. They may have sent you the form in a large packet when you sold the house and paid off the old mortgage. There is a tradition of sending customers their entire mortgage file once they pay off the mortgage after 30 years - which is very rare nowadays but many banks still adhere to it because the mortgage business is built on momentum and very slow to change. Otherwise, the title company should have a copy of it. If you don\'t know which company was used, they should be named as Trustee on the Deed Of Trust (which in most states is the official name of the document that we call a ""mortgage""). The county recorder\'s office will have a copy of that Deed Of Trust on record if you can\'t find it anywhere. Some counties have digitized these so you could find it online, but some would require you to request a copy and pay a small printing fee for it."', "Some of the information on the HUD-1 form would have been useful to complete the income tax paperwork the next spring. It would have had numbers for Taxes, and interest that were addressed at the settlement. It is possible it is mixed in with the next years tax information. If I needed a HUD-1 form from 15 years ago, I wouldn't ask the real estate agent, I would ask the settlement company. They might have a copy of the paperwork. They might have to retrieve it from an archive, so it could take time, and they could charge a fee. The local government probably doesn't have a copy of the HUD-1, but they do have paperwork documenting the sale price when the transaction took place. I know that the jurisdictions in my area have on-line the tax appraisal information going back a number of years. They also list all the purchases because of the change in ownership, and many also list any name changes. You probably don't want a screen capture of the transactions page, but the tax office might have what you need. This is the same information that the title search company was retrieving for their report. Question. Is there going to be capital gains? For a single person there is no gains unless the increase in price is $250,000. For a couple it is $500,000. I am ignoring any time requirements because you mentioned the purchase was 15 years ago. I am also assuming that it was never a rental property, because that would require a lot more paperwork."]

How can you possibly lose on investments in stocks?

["In your own example of VW, it dropped from its peak price of $253 to $92. If you had invested $10,000 in VW in April 2015, by September of that year it would have gone down to $3,600. If you held on to your investment, you would now be getting back to $6,700 on that original $10,000 investment. Your own example demonstrates that it is possible to lose. I have a friend who put his fortune into a company called WorldCom (one of the examples D Stanley shared). He actually lost all of his retirement. Luckily he made some money back when the startup we both worked for was sold to a much larger company. Unsophisticated investors lose money all the time by investing in individual companies. Your best bet is to start searching this site for answers on how to invest your money so that you can see actual strategies that reduce your investment risk. Here's a starting point: Best way to start investing, for a young person just starting their career? If you want to better illustrate this principle to yourself, try this stock market simulation game.", '"Once you buy stocks on X day of the month, the chances of stocks never actually going above and beyond your point of value on the chart are close to none. How about Enron? GM? WorldCom? Lehman Brothers? Those are just a few of the many stocks that went to 0. Even stock in solvent companies have an ""all-time high"" that it will never reach again. Please explain to my why my thought is [in]correct. It is based on flawed assumptions, specifically that stock always regain any losses from any point in time. This is not true. Stocks go up and down - sometimes that have losses that are never made up, even if they don\'t go bankrupt. If your argument is that you should cash out any gains regardless of size, and you will ""never lose"", I would argue that you might have very small gains in most cases, but there are still times where you are going to lose value and never regain it, and those losses can easily wipe out any gains you\'ve made. Never bought stocks and if I try something stupid I\'ll lose my money, so why not ask the professionals first..? If you really believe that you ""can\'t lose"" in the stock market then do NOT buy individual stocks. You may as well buy a lottery ticket (not really, those are actually worthless). Stick to index funds or other stable investments that don\'t rely on the performance of a single company and its management. Yes, diversification reduces (not eliminates) risk of losses. Yes, chasing unreasonable gains can cause you to lose. But what is a ""reasonable gain""? Why is your ""guaranteed"" X% gain better than the ""unreasonable"" Y% gain? How do you know what a ""reasonable"" gain for an individual stock is?"', '"If you\'re talking about a single stock, you greatly underestimate the chances of it dropping, even long-term. Check out the 12 companies that made up the first Dow Jones Industrial Average in 1896. There is probably only one you\'ve heard of: GE. Many of the others are long gone or have since been bought up by larger companies. And remember these were 12 companies that were deemed to be the most representative of the stock market around the turn of the 20th century. Now, if you\'re talking about funds that hold many stocks (up to thousands), then your question is a little different. Over the long-term (25+ years), we have never experienced a period where the overall market lost value. Of course, as you recognize, the psychology of investors is a very important factor. If the stock market loses half of its value in a year (as it has done a few times), people will be inundated with bad news and proclamations of ""this time it\'s different!"" and explanations of why the stock market will never recover. Perhaps this may be true some day, but it never has been thus far. So based on all the evidence we have, if you hold a well-diversified fund, the chances of it going down long-term (again, meaning 25+ years) are basically zero."', '"For whatever it\'s worth. Judging from the comments in the other answers, I think everyone is addressing your question, ""How can you possibly lose money,"" there are a lot of ways to possibly lose money in the stock market. Here are my thoughts. This is a chart of the S&P 500 from about 1996 to about 2012. At the top from the first arrow the entire S&P500 index fell about 45%. From the top of the second arrow the entire S&P500 index fell about 52%. It is really easy to look at our sustained bull market and feel invincible. And while I\'ll concede that not every company in the index fell over these two periods, bear in mind that the S&P500 index is a collection of the 500 largest companies in the United States, and the entire index lost half it\'s value twice. As the companies contained in the index shrink in value, they were replaced by companies that are the new biggest 500 in the country, then those fell too, and so on and so forth until the entire index lost half. Value is a funny thing because it isn\'t necessarily tied to the performance of the business (look at the current rosy valuations of all these non-earnings tech-companies). It could be that a company is still performing very well but there are just no buyers for the stock. So, how can you lose money in the stock market? Very easily. In A practical sense, it\'s when you need the money and can no longer weather the storm. People who went out for retirement around 2000 couldn\'t sit around and wait until 2007 for their account values to be replenished. This is why you roll off your stock exposure as you age. As you get older you don\'t have time and if you stop having income you can find yourself selling your assets at the least opportune time."', "I think it may be best to take everything you're asking line-by-line. Once you buy stocks on X day of the month, the chances of stocks never actually going above and beyond your point of value on the chart are close to none. This is not true. Companies can go out of business, or take a major hit and never recover. Take Volkswagen for example, in 2015 due to a scandal they were involved in, their stocks went downhill. Now their stocks are starting to rise again. The investors goal is not to wait as long as necessary to make a profit on every stock purchase, but to make the largest profit possible in the shortest time possible. Sometimes this means selling a stock before it recovers (if it ever does). I think the problem with most buyers is that they desire the most gain they can possibly have. However, that is very risky. This can be true. Every investor needs to gauge the risk they're willing to take and high-gain investments are riskier. Therefore, it's better to be winning [small/medium] amounts of money (~)100% of the time than [any] amount of money <~25%. Safer investments do tend to yield more consistent returns, but this doesn't mean that every investor should aim for low-yield investments. Again, this is driven by the investor's risk tolerance. To conclude, profitable companies' stock tends to increase over time and less aggressive investments are safer, but it is possible to lose from any stock investment.", '"Some stocks do fall to zero. I don\'t have statistics handy, but I\'d guess that a majority of all the companies ever started are now bankrupt and worth zero. Even if a company does not go bankrupt, there is no guarantee that it\'s value will increase forever, even in a general, overall sense. You might buy a stock when it is at or near its peak, and then it loses value and never regains it. Even if a stock will go back up, you can\'t know for certain that it will. Suppose you bought a stock for $10 and it\'s now at $5. If you sell, you lose half your money. But if you hold on, it MIGHT go back up and you make a profit. Or it might continue going down and you lose even more, perhaps your entire investment. A rational person might decide to sell now and cut his losses. Of course, I\'m sure many investors have had the experience of selling a stock at a loss, and then seeing the price skyrocket. But there have also been plenty of investors who decided to hold on, only to lose more money. (Just a couple of weeks ago a stock I bought for $1.50 was selling for $14. I could have sold for like 900% profit. Instead I decided to hold on and see if it went yet higher. It\'s now at $2.50. Fortunately I only invested something like $800. If it goes to zero it will be annoying but not ruin me.) On a bigger scale, if you invest in a variety of stocks and hold on to them for a long period of time, the chance that you will lose money is small. The stock market as a whole has consistently gone up in the long term. But the chance is not zero. And a key phrase is ""in the long term"". If you need the money today, the fact that the market will probably go back up within a few months or a year or so may not help."', '"Easiest thing ever. In fact, 99% of people are loosing money. If you perform worse then 10% annually in cash (average over 5-10 years), then you better never even think about trading/investing. Most people are sitting at 0%..-5% annually. They win some, loose some, and are being outrun by inflation and commissions. In fact, fall of market is not a big deal, stock indexes are often jump back in a few months. If you rebalance properly, it is mitigated. Your much bigger enemy is inflation. If you think inflation is small, look at gold price over past 20 years. Some people, Winners at first, grow to +10%, get too relaxed and start to grow already lost position. That one loose trade eats 10% of their portfolio. Only there that people realize they should cut it off, when they already lost their profits. And they start again with +0%. This is hard thing to accept, but most of people are not made for that type of business. Even worse, they think ""if I had bigger budget, I would perform better"", which is kind of self-lie."']

What is a maximum amount that I can wire transfer out of US?

['Chase has a limit of $500,000 per day. A banker should be able to help you determine any immediate tax liabilities that will arise as a direct result of the transaction. You may wish to consult with a tax professional about any indirect implications the transfer may have. This transaction will be reported to the government but assuming that you are not involved in any illegitimate activities the likelihood of the US government taking any action on the notice is incredibly low. I have heard of 7 and 14 day holds being placed on out of character transfers but if you are buying property you should work with your bank to help facilitate. Bankers understand the business and can help you avoid any appearances of impropriety that the government flags. Should your account be flagged, I would retain a lawyer immediately. If you feel you have a reason to be concerned, then I would contact a lawyer in the US and Thailand before initiating the transfer. As they say an ounce of prevention is worth a pound of cure.', "The limit, if any, would be established by your financial institutions. You would need to contact both your sending and receiving bank to ascertain any limitation they impose on wire transfers. Generally, taxes aren't imposed on transference of funds between accounts you own, but I'm not familiar with tax in Thailand and I could be wrong on that half of the question.", "I can clear the Thailand side for you. These are the sale tax in Thailand: Don't forget to ask your bank in Thailand to issue an (FTFs). This document shows the money originated from abroad (before in came to your Thai account) from outside of Thailand. The land office will ask for the (FTFs)."]

How does remittance work? How does it differ from direct money transfer?

['"The Option 2 in your answer is how most of the money is moved cross border. It is called International Transfer, most of it carried out using the SWIFT network. This is expensive, at a minimum it costs in the range of USD 30 to USD 50. This becomes a expensive mechanism to transfer small sums of money that individuals are typically looking at. Over a period of years, the low value payments by individuals between certain pair of countries is quite high, example US-India, US-China, Middle-East-India, US-Mexico etc ... With the intention to reduce cost, Banks have built a different work-flow, this is the Option 1. This essentially works on getting money from multiple individuals in EUR. The aggregated sum is converted into INR, then transferred to partner Bank in India via Single SWIFT. Alongside the partner bank is also sent a file of instructions having the credit account. The Partner Bank in India will use the local clearing network [these days NEFT] to credit the funds to the Indian account. Option 3: Other methods include you writing a check in EUR and sending it over to a friend/relative in India to deposit this into Indian Account. Typically very nominal costs. Typically one month of timelines. Option 4: Another method would be to visit an Indian Bank and ask them to issue a ""Rupee Draft/Bankers Check"" payable in India. The charges for this would be higher than Option 3, less than Option 1. Mail this to friend/relative in India to deposit this into Indian Account. Typically couple of days timelines for transfer to happen."', 'If you are a citizen of India and working in Germany, then you are most likely an NRI (NonResident Indian). If so, you are not entitled to hold an ordinary Indian bank account, and all such existing accounts must be converted to NRO (NonResident Ordinary) accounts. If your Indian bank knows about NRO accounts, then it will be eager to assist you in the process of converting your existing accounts to NRO accounts most likely it also offers a money remittance scheme (names like Remit2India or Money2India) which will take Euros from your EU bank account and deposit INR into your NRO account. Or, you can create an NRE (NonResident External) account to receive remittances from outside India. The difference is that interest earned in an NRO account is taxable income to you in India (and subject to TDS, tax deduction at source) while interest earned in an NRE account is not taxable in India. The remittance process takes a while to set up, but once in place, most remittances take 5 to 6 business days to complete.']

How do taxes work with donations made to an individual, e.g. for free software I wrote?

["Do I report it as income? Is it subject to just the same amount of taxes (~30%) as regular income? Are there any restrictions on how it can be used? It is income. You can deduct the costs of maintaining the web page and producing the software from it (have an accountant do that for you, there are strict rules on how to do that, and you can only deduct up to the income if its a hobby and not a for-profit business), but otherwise it's earned income like any other self employment income. It is reported on your schedule C or on line 21 of your 1040 (miscellaneous income), and you're also liable for self-employment taxes on this income. There are no restrictions, it's your money. Technically, who is the donation even being made to? Me, just because I own the webpage? Yes. This is for the United States, but is there any difference if the donations come from overseas? No, unless you paid foreign taxes on the money (in which case you should fill form 1116 and ask for credit). If you create an official 501(c) organization to which the donations are given, instead of you getting it directly, the tax treatment will be different. But of course, you have to have a real charitable organization for that. To avoid confusion - I'm not a licensed tax professional and this is not a tax advice. If in doubt - talk to a EA/CPA licensed in your State."]

Why is company provided health insurance tax free, but individual health insurance is not?

["During World War II, the United States (US) instituted wage and price controls. To attract better employees, companies would offer benefits to get around salary limits. Health insurance was one of the more successful benefits. At that time, income taxes were newer and there were many ways to evade them. Companies could generally deduct expenses. So at that time, health care was deductible because everything was. And at that time, only wages were taxable compensation from employer to employee. Since that time, many other benefits have become non-deductible for employers, e.g. housing or the reduced deduction for meals and entertainment. But health care is generally regarded as different, as a necessity. While everyone needs to eat, not everyone needs to eat at a $100 a meal restaurant. People who need expensive health care really need it. People who eat expensive food just prefer it. And of course, health care is more intermittent where food is relatively consistent. You don't need ten thousand calories one day and zero the next. But some families have no health care expenses in a year while another might have cancer or a pregnancy. Note that medical care expenses can be deducted for individuals if they are large enough in aggregate and you itemize. And of course both businesses and workers have incentives to maintain the current system with deductibility. Health insurance is a common benefit. Housing is not (although it's worth noting that travel housing and meals are deductible). So there have been few people impacted by making housing taxable while many people would be impacted by taxable health insurance. You can deduct health insurance costs if self-employed. It's also not true that health insurance is the only benefit with preferential tax treatment. Retirement and child care are also deductible. Even meals and housing can be deducted in certain circumstances. The complex rules about what and how much is deductible. There have been rumbles about normalizing the tax treatment of health insurance and medical care, but there is a lot of opposition. Insurance companies oppose making all healthcare expenses deductible, as that reduces their effective benefit. They would prefer only insurance premiums be deductible. Traditionally employed individuals oppose making health insurance taxable, as that would increase their taxes. So the situation persists. There isn't quite enough support to move in either direction, although the current compromise is economically silly.", "All questions regarding why is activity X taxed but activity Y taxed differently boils down to: The legislature wanted to promote or discourage the activity. By making employer provided healthcare tax free to the employee, the average worker like the plan. Not only is a significant portion not coming out of my paycheck, I also don't have to pay taxes on the benefit. Some organization pushed for this and the legislature agreed.", "This probably is a question that belongs on History but here's the basic reason: the or Employee Retirement Income Security Act (ERISA) of 1974 established that health benefits under approved plans were not taxable to the employee. If the employer were to pay for an employees non ERISA approved individual plan, it would be a taxable benefit. The longer story is that many polticians (esp. President Richard Nixon) were concerned that public pressure was going to lead public sentiment toward nationalized health care. This made health insurance more affordable to employees and effectively made it a cheaper way to compensate employees similar to how 401K contributions are worth more (in nominal terms) to the employee than an equivalent amount of cash. While the law was not signed by Richard Nixon due to some other stuff that was going on, it was something proposed and pushed by his administration.", "The idea is that the premiums (or costs) associated with the plan are a business expense, you know that already. The distinction here is that employees don't pay premiums, they elect to contribute. The company sponsors a plan, the employees then choose to accept less salary in order to participate in the employer's plan. The idea is that you're foregoing income. Why is the employee not taxed on this cost? One major reason is that the employee has no say in, and often no idea, what the gross costs are (some find out if they ever receive COBRA election paperwork). There are more benefits than strict healthcare that are Section 125 eligible. The government has a vested interest in keeping the population healthy, and when the ERISA laws and Section 125 were written it was (and still is) a pretty low friction way to get health insurance out to more people. At this point, taking away the tax break from the employees would be a huge government take away from most of the population. Try to get a politician to take something away from taxpayers. Why doesn't the deduction exist in kind to people buying individual coverage? Ask your legislators. There are thousands of preferential tax treatment oddities, where some industry will get some sort of benefit or break. I'm not sure what leads you to think there needs to be some supremely logical reason for this oddity to exit.", "Basically a company who provides health insurance for their employees provides it as part of the employee's salary package. This is an expense by the company in its pursuit of making income. In general, tax deductions are available on any expense incurred in deriving income (the exception is when social policy allows deductions for other types of expenses). If you pay for your own health insurance individually, then this expense is not an expense for you to derive your income, and as such is not tax deductible."]

Should you co-sign a personal loan for a friend/family member? Why/why not?

['"My thoughts on loaning money to friends or family are outlined pretty extensively here, but cosigning on a loan is a different matter. It is almost never a good idea to do this (I say ""almost"" only because I dislike absolutes). Here are the reasons why: Now, all that said, if my sister or parents were dying of cancer and cosigning a loan was the only way to cure them, I might consider cosigning on a loan with them, if that was the only option. But, I would bet that 99.9% of such cases are not so dire, and your would-be co-borrower will survive with out the co-signing."', '"My personal rule is to not loan money (or co-sign) for any amount that I am not willing to give away. It can go wrong in so many ways, and having a family or friend involved means making a ""business"" decision is difficult. If a bank won\'t loan the person the money, why should I? Being a co-signer is the same as borrowing the money in my name and giving it right over to the borrower. There might be great reasons to do it. I would probably sign a loan to keep my family alive or healthy, but no other reason. There are many ways to help without signing a loan. Give a room and a place to live, loan a car. The other thing is if you really truly believe in the borrower, it won\'t do long term damage to your credit or your financial goals, and you are the only resort; go ahead. I am thinking about helping a teenager afford their first car or student loans."', "Yes, there are times when co-signing is the right choice. One is when you know more about the person than the loan issuer does. Consider a young person who has just started working in a volatile field, the kind of job where you can be told on Friday that you only get one shift next week but things might pick up the week after, and who makes maybe $12 an hour in that job. You've done the math and with 40 hour weeks they can easily afford the loan. Furthermore, you know this person well and you know that after a few weeks of not enough shifts, they've got the gumption to go out and find a second job or a different job that will give them 40 hours or more a week. And you know that they have some savings they could use to ensure that no payments will be missed even on low-wage weeks. You can cosign for this person, say for a car loan to get them a car they can drive to that job, knowing that they aren't going to walk away and just stop making the payments. The loan issuer doesn't know any of that. Or consider a young person with poor credit but good income who has recently decided to get smart about money, has written out a budget and a plan to rehabilitate their credit, and who you know will work passionately to make every payment and get the credit score up to a place where they can buy a house or whatever their goal is. Again, you can cosign for this person to make that happen, because you know something the lender doesn't. Or consider a middle aged person who's had some very hard knocks: laid off in a plant closing perhaps, marriage failure, lost all their house equity when the market collapsed, that sort of thing. They have a chance to start over again somewhere else and you have a chance to help. Again you know this isn't someone who is going to mismanage their money and walk away from the payments and leave you holding the bag. If you would give the person the money anyway (say, a car for your newly graduated child) then cosigning instead gives them more of a sense of accomplishment, since they paid for it, and gives them a great credit rating too. If you would not give the person the entire loan amount, but would make their payments for many months or even a year (say, your brother's mortgage for the house where he lives with a sick wife and 3 small children), then cosigning is only making official what you would have done anyway. Arrange with the borrower that if they can't make their payments any more, you will backstop them AND the item (car, house, whatever) is going up for sale to cover your losses. If you don't think you could enforce that just from the strength of the relationship, reconsider co-signing. Then sign what you need to sign and step away from it. It's their loan, not yours. You want them to pay it and to manage it and to leave you out of it until it's all paid off and they thank you for your help. If things go south, you will have to pay, and it may take a while for you to sell the item or otherwise stop the paying, so you do need to be very confident that the borrower is going to make every single payment on time. My point is just that you can have that confidence, based on personal knowledge of character, employment situation, savings and other resources, in a way that a lender really cannot.", "Never co-sign a loan for someone, especially family Taking out a loan for yourself is bad enough, but co-signing a loan is just plain stupid. Think about it, if the bank is asking for a co-signer its because they are not very confident that the applicant is going to be paying back the loan. So why would you then step up and say I'll pay back the loan if they don't, make me a co-signer please. Here is a list of things that people never think about when they cosign a loan for somebody. Now if you absolutely must co-sign a loan here is how I would do it. I, the co-signer would be the one who makes the payments to ensure that the loan was paid on time and I would be the one collecting the payment from the person who is getting the loan. Its a very simple way of preventing some of the worst situations that can arise and you should be willing to make the payments anyway after all thats what it means to cosign a loan. Your just turning things around and paying the loan upfront instead of paying after the applicant defaults and ruins every ones credit. (Source: user's own blog post Never co-sign a loan for someone, especially family)", 'I know this question has a lot of answers already, but I feel the answers are phrased either strongly against, or mildly for, co-signing. What it amounts down to is that this is a personal choice. You cannot receive reliable information as to whether or not co-signing this loan is a good move due to lack of information. The person involved is going to know the person they would be co-signing for, and the people on this site will only have their own personal preferences of experiences to draw from. You know if they are reliable, if they will be able to pay off the loan without need for the banks to come after you. This site can offer general theories, but I think it should be kept in mind that this is wholly a personal decision for the person involved, and them alone to make based on the facts that they know and we do not.']

What can I replace Microsoft Money with, now that MS has abandoned it?

["I've been budgeting with MS Money since 2004 and was pretty disappointed to hear it's being discontinued. Budgeting is actually a stress-relieving hobby for me, and I can be a bit of a control-freak when it comes to finances, so I decided to start early looking for a replacement rather than waiting until MS Money can no longer download transactions. Here are the pros and cons of the ones I've tried (updated 10/2010): You Need A Budget Pro (YNAB) - Based on the old envelopes system, YNAB has you allot money from each paycheck to a specific budget category (envelope). It encourages you to live on last money's income, and if you have trouble with overspending, that can be a great plan. Personally, I'm a big believer in the envelope concept, so that's the biggest pro I found. Also, it's a downloaded software, so once I've bought it (for about $50) it's mine, without forced upgrades as far as I've seen. The big con for me was that it does not automatically download transactions. I would have to sign on to each institution's website and manually download to the program. Also, coming from Money, I'm used to having features that YNAB doesn't offer, like the ability to store information about my accounts. Overall, it's forward-thinking and a good budgeting system, but will take some extra time to download transactions and isn't really a comprehensive management tool for all my financial needs. You can try it out with their free trial. Mint - This is a free online program. The free part was a major pro. It also looks pretty, if that's important to you. Updating is automatic, once you've got it all set up, so that's a pro. Mint's budgeting tools are so-so. Basically, you choose a category and tell it your limit. It yells at you (by text or email) when you cross the line, but doesn't seem to offer any other incentive to stay on budget. When I first looked at Mint, it did not connect with my credit union, but it currently connects to all my banks and all but one of my student loan institutions. Another recent improvement is that Mint now allows you to manually add transactions, including pending checks and cash transactions. The cons for me are that it does not give me a good end-of-the-month report, doesn't allow me to enter details of my paychecks, and doesn't give me any cash-flow forecasting. Overall, Mint is a good casual, retrospective, free online tool, but doesn't allow for much planning ahead. Mvelopes - Here's another online option, but this one is subscription-based. Again, we find the old envelopes system, which I think is smart, so that's a pro for me. It's online, so it downloads transactions automatically, but also allows you to manually add transactions, so another pro. The big con on this one is the cost. Depending on how you far ahead you choose to pay (quarterly, yearly or biannually), you're paying $7.60 to $12 per month. They do offer a free trial for 14 days (plus another 14 days offered when you try to cancel). Another con is that they don't provide meaningful reports. Overall, a good concept, but not worth the cost for me. Quicken - I hadn't tried Quicken earlier because they don't offer a free trial, but after the last few fell short, I landed with Quicken 2009. Pro for Quicken, as an MS Money user is that it is remarkably similar in format and options. The registers and reports are nearly identical. One frustration I'd had with Money was that it was ridiculously slow at start-up, and after a year or so of entering data, Quicken is dragging. Con for Quicken, again as an MS Money user, is that it's budgeting is not as detailed as I would like. Also, it does not download transactions smoothly now that my banks all ask security questions as part of sign-in. I have to sign in to my bank's website and manually download. Quicken 2011 is out now, but I haven't tried it yet. Hopefully they've solved the problem of security questions. Quicken 2011 promises an improved cash-flow forecast, which sounds promising, and was a feature of MS Money that I have very much missed. Haven't decided yet if it's worth the $50 to upgrade to 2011.", "I use GnuCash which I really like. However, I've never used any other personal finance software so I can't really compare. Before GnuCash, I used an Excel spreadsheet which works fine for very basic finances. Pros Cons", 'Well, you could replace it with.. itself! Microsoft Money Plus Sunset versions The Microsoft Money Plus Sunset versions are replacements for expired versions of Microsoft Money Essentials, Deluxe, Premium, and Home and Business. They allow existing customers to use MoneyPlus to continue accessing their data. Changes to the new versions include file conversions from older versions of Money, no required activation, no online services and no assisted support. Microsoft Money Plus Sunset is available now. Download at: http://www.microsoft.com/money/sunset.mspx', "How complicated is your budget? We have a fairly in depth excel spreadsheet that does the trick for us. Lots of formulas and whatnot for calculating income, outgo, expected and actual expenses, expenses budgeted over time (i.e. planned expenses that are semi-annual or annual) as well as the necessary emergency funds based on expenses. Took me a few hours to initially create and many tweaks over months to get just right but it's reliable and we know we'll never lose support for it. I'd be willing to share it if desired, I'll just have to remove our personal finance figures from it first.", 'Current Money users may want to take a look at this: http://sites.google.com/site/pocketsense/home/msmoneyfixp1 Pretty easy (and secure) way to continue getting online data into Money.', 'www.mint.com is a very good web site that can upload your financial data from your bank and analyze it for you. Security concerns seem to have been addressed reassuringly.', "MoneyDance Is the way to go. I've been using it for years and it works well. It keeps getting better, and best of all, it's completely cross platform! Mac, Windows and linux!", 'I used to use Quicken, but support for that has been suspended in the UK. I had started using Mvelopes, but support for that was suspended as well! What I use now is an IPhone app called IXpenseit to track my spending.', 'I use http://moneydance.com/ it has Mac, Windows and Linux versions and works well for my needs.', "Uh, Quicken is virtually identical to MS Money. If you liked money and don't want to change, use that.", "I use MoneyStrands.com to manage my spending. It's a lot like Mint, but provides support for more banks, and works with most Canadian financial institutions. I can't really compare them fairly though, since I didn't bother with Mint after learning that they don't care about Canadians. If your bank isn't supported by MoneyStrands, or you don't want to trust an online webiste with your account login, you can create accounts for manually uploaded files. It just means you have to log into your bank yourself, download the transactions as QFX, OFX, CSV or other supported formats, and then upload the files to the appropriate account in MoneyStrands. I love the expense tracking and reporting that MoneyStrands offers, but like Mint, their budgeting feature is seriously lacking. Fortunately I don't need to budget month-to-month, I just use it to see how much I spend on various categories, to help create annual budgets and decide how much I can invest or use for a vacation.", 'I have been using Acemony http://www.mechcad.net/products/acemoney/ for a couple of years now and extremely happy with it. Very simple and intuitive to use. The best part is - life-long free upgrades', 'If you would like to use linux I suggest you to use KMyMoney http://kmymoney2.sourceforge.net/ It is based on gnucash but it is easier to use IMO', "hledger is a free software, cross-platform double-entry accounting tool I've been working on for a while. It has command-line and web-based interfaces to your local data, and some other interesting features. There's also ledger (http://wiki.github.com/jwiegley/ledger/) which is command-line only. These are.. different, but worth a look for some folks.", 'I have used Quicken for over 10 years. It has always provided the information I needed and I have always received good support from Intuit.', 'Check the Financial section in this list of Open Source Software', 'I suggest you to test AlauxSoft Accounts and Budget. This software is a money-like. There is a freeware and a shareware (24 EUR). You will find its at http://www.alauxsoft.com Best regards, Michel ALAUX.']

Idea for getting rich using computers to track stocks

["The main reason I'm aware of that very few individuals do this sort of trading is that you're not taking into account the transaction costs, which can and will be considerable for a small-time investor. Say your transaction costs you $12, that means in order to come out ahead you'll have to have a fairly large position in a given instrument to make that fee back and some money. Most smaller investors wouldn't really want to tie up 5-6 figures for a day on the chance that you'll get $100 back. The economics change for investment firms, especially market makers that get special low fees for being a market maker (ie, offering liquidity by quoting all the time).", '"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."', '"There are many ways to trade. Rules based trading is practiced by professionals. You can indeed create a rule set to make buy and sell decisions based on the price action of your chosen security. I will direct you to a good website to further your study: I have found that systemtradersuccess.com is a well written blog, informative and not just a big sales pitch. You will see how to develop and evaluate trading systems. If you decide to venture down this path, a good book to read is Charles Wright\'s ""Trading As A Business."" It will get a little technical, as it discusses how to develop trading systems using the Tradestation trading platform, which is a very powerful tool for advanced traders and comes with a significant monthly usage fee (~$99/mo). But you don\'t have to have tradestation to understand these concepts and with an intermediate level of spreadsheet skills, you can run your own backtests. Here is a trading system example, Larry Connors\' ""2 period RSI system"", see how it is evaluated: http://systemtradersuccess.com/connors-2-period-rsi-update-2014/, and this video teaches a bit more about this particular trading system: https://www.youtube.com/watch?v=i_h9P8dqN4Y IMPORTANT: This is not a recommendation to use this or any specific trading system, nor is it a suggestion that using these tools or websites is a path to guaranteed profits. Trading is a very risky endeavor. You can easily lose huge sums of money. Good luck!"']

Why do only motor insurers employ “No Claims Discounts”?

['"Some people are better drivers than others. A collision can happen to anybody, even good drivers. The collision might not be your fault at all; it might be entirely the fault of the other party. However, the best drivers do a better job of avoiding collisions in situations where the other drivers on the road are doing the wrong things. The ""no claims discount"" is a way to identify and reward those good drivers, as they have a lower likelihood of claims in the future."', '"Discounting premiums based on some past history is not unique to auto policies. Other insurers will discount premiums based on past claims history they just don\'t shout about it as a marketing means to attract customers. Life insurance is underwritten based on your health history; if you want to consider your ""preferred"" underwriting status based on your clear health history a ""discount based on your healthy habits"" you\'re free to do so. All sorts of lines of insurance use all sorts of things to determine an underwriting classes. The fact that auto insurers trumpet specific discounts does not mean the same net effect is not available on other lines of coverage. Most states require auto rates and discounts to be filed and approved with some state regulator, some regulatory bodies even require that certain discounts exist. You could likely negotiate with your business insurance underwriters about a better rate and if the underwriters saw fit they could give you a discount. Auto insurers can offer discounts but are generally beholden to whatever rate sheet is on file with the applicable regulatory body. For the person who downvoted, here\'s a link to a spreadsheet outlining one of the CA department of insurance allowable rating factor sheets related to auto insurance."']

Renting from self during out of area remodel project - deductible?

["There are certain situations where you could legally pay yourself rent, but it'd be in the context of multiple business entities interacting, never in the context of an individual renting their own property. Even if you could, any rent paid to yourself would count as rental income, so there'd be no benefit. Edit: I was hunting for examples where it might be acceptable, and didn't, but I found a good explanation as to why it is not acceptable from Brandon Hall on a BiggerPockets post: To get technical, you will be going up against the Economic Substance Doctrine which states that a transaction has economic substance if: (1) the transaction changes in a meaningful way (apart from Federal income tax effects) the taxpayer’s economic position; and (2) the taxpayer has a substantial purpose (apart from Federal income tax effects) for entering into such transaction. By transferring your primary residence into a LLC, you would not be changing your economic position. Further, you do not have a substantial purpose for entering into such transaction other than to simply avoid paying federal income taxes. So it might make sense if multiple people owned the LLC that owned the property you wanted to rent, and there are instances where company X owns holding company Y that owns an office building that company X rents space in. But if you're the sole player in the LLC's then it sounds like a no-go."]

Why do governments borrow money instead of printing it?

['"Governments borrowing money doesn\'t create new money. When banks ""borrow"" money (i.e. take deposits), it does effectively create money because the depositor expects to be able to get the money back at any time, but the bank assumes that most won\'t actually do this and lends out most of the money to other people. If everyone did actually ask for their money back at once, the illusion of the extra money created by this process would collapse, and the bank would go bust. In contrast when governments borrow money, the loan isn\'t repayable on demand, it has a fixed maturity and the money is only repaid at the end of that period (plus interest at defined points during the period). So holders of government debt don\'t have money they can spend (they can turn it into money they can spend but only by finding someone else to buy it). So government debt doesn\'t create inflation in itself. If they printed money, then they\'d be devaluing the money of everyone who had saved or invested, whereas if they borrow money and use taxes to repay it, the burden falls more evenly across the economy and doesn\'t disproportionately penalise certain sets of people."', "“Why do governments borrow money instead of printing it? (When printing money, one doesn't need to pay interest).” Good question. Numerous leading economists, including a couple of economics Nobel Laureates have asked the same question and concluded that borrowing can be dispensed with. First, Milton Freidman set out a monetary system in a paper in the American Economic Review which involved no government borrowing, and govt just printed money (in a responsible fashion of course) as and when needed. See: http://www.jstor.org/pss/1810624 A second Nobel Laureate with similar views was William Vickrey. A third economist with similar views (of Keynes’ era) was Abba Lerner. Keynes said of Lerner, “Lerner's argument is impeccable, but heaven help anyone who tries to put it across to the plain man at this stage of the evolution of our ideas”.", '"Yes - Simply put, printing money is called ""monetizing the debt"" and would result in some nasty inflation. It\'s a no-no as it quickly devalues the currency and makes it far more difficult to borrow in the future, an entire generation will remember getting burned by it. If, say, Canada\'s currency were suddenly worth half as much and you received half your investment back in US dollars (e.g. you paid US$10,000, but now have US$5000) would you ever trust them again? The economy is far more complex than one can discuss here, but the fractional reserve system is the next creator of money, although it\'s not unlimited, the reserve requirement throttles it back. The demand for loans is impacted both by the rate itself and the bank\'s willingness to lend. The housing bubble had multiple causes. In a sense Tucson is right. Anything we do to make houses more affordable can cause house price inflation. But - the over the top underwriting had more impact in my opinion. People lost sight of good lending practices. The option rate interest only ARMs were financial time bombs."', "One important answer is still missing: governments may not be able to do print money because of international agreements. This is in fact a very important reason: it applies to the entire Eurozone. (I admit that many Eurozone countries also not allowed to borrow as much as they do now, but somehow that's considered a far lesser sin).", '"If the government prints money recklessly and causes inflation, people will come to expect inflation, and the value of the currency will plummet, and you\'ll end up like Zimbabwe where a trillion dollars won\'t buy a loaf of bread. If the government actually pays people for the money they borrow, they don\'t have this problem - and as it turns out, the US government can get pretty good rates on borrowing in general, in part because they\'re extraordinarily good about paying them back. (Also, inflation expectations are low, so people will accept 1-2% interest rates. If you expected inflation of 10%, you\'d see people demanding something more like 12% interest rates.) (The downside of too much of this sort of borrowing is that it ""crowds out"" other borrowing, which may harm the economy. Who would lend money to / invest in a small business, if the government is paying good money and there\'s almost no risk at all?) Now, inflation can come into play afterward, if the Fed decides it needs to maintain ""easy money"" policies to stimulate the economy (because taxes are too high because we\'re paying off the debt, or because we\'ve crowded out smaller borrowers, or something). -- In general, you can count on the the principle that if you, as the government, try to play too many games with people\'s money... well, people aren\'t stupid; they will eventually catch on, and adjust their behavior to compensate, and then you\'re right back where you started, but with less trust."', 'I believe there are two ways new money is created: My favorite description of this (money creation) comes from Chris Martenson: the video is here on Youtube. And yes, I believe both can create inflation. In fact this is what happened in the US between 2004 and 2007: increasing loans to households to buy houses created an inflation of home prices.', "The Government doesn't borrow money. It in fact simply prints it. The bond market is used for an advanced way of controlling the demand for this printed money. Think about it logically. Take 2011 for example. The Govt spent $1.7 trillion more than it took in. This is real money that get's credited in to people's bank accounts to purchase real goods and services. Now who purchases the majority of treasuries? The Primary Dealers. What are the Primary Dealers? They are banks. Where do banks get their money? From us. So now put two and two together. When the Govt spends $1.7 trillion and credits our bank accounts, the banking system has $1.7 trillion more. Then that money flows in to pension funds, gets spent in to corporation who then send that money to China for cheap products... and eventually the money spent purchases up Govt securities for investments. We had to physically give China 1 trillion dollars for them to be able to purchase 1 trillion dollars in securities. So it makes sense if you think about how the math works in the real world.", "The government could actually do either one to expand the money supply as necessary to keep up with rising productivity / an increased labor supply. The question is merely political. In the case of the US, printing money involves convincing politicians to spend it. While we currently run a deficit, there is a large lobby within the US who are incredibly anti-deficit, and are fighting against this for no good reason. If the money supply were left in their hands, we would end up with a shrinking money supply and rapid deflation. On the other hand, the Fed can simply bypass the politicians, and control the money supply directly by issuing bonds. It's easier for them, they don't have to explain it to voters (only to economists), and it gives them more direct control without any messy political considerations like which programs to expand or cut.", 'My own simple answer is that it will affect and reduce productivity (e.g. Zimbabwe). it will also cause inflation which mean that no one will want to work for production again.', '"My answer is that when confronted with the obvious, the most common human reaction is to seek reasons for it, because things have to be right. They have to have a reason. We don\'t like it when things suck. So when finding out that you are being ripped off every day of your life, your reaction is ""There must be a logical reason that perfectly explain why this is. After all, the world is fair, governments are working in our best interest and if they do it this way, they must have a very good reason for it."" Sorry, but that not the case. You have the facts. You are just not looking at them. Economics, as a subject, is the proper management of resources and production. Now, forget the fancy theories, the elaborate nonsense about stocks and bonds and currencies and pay attention to the actual situation. On our planet, most people earn $2,000 per year. Clean water is not available for a very sizable percent of the world\'s population. Admittedly, 90% of the world\'s wealth is concentrated in the hands of the most wealthy 10%. A Chinese engineer earns a fraction of what a similarly qualified engineer earns in the States. Most people, even in rich countries, have a negative net value. They have mortgages that run for a third of their lifetimes, credit card debts, loans... do the balance. Most people are broke. Does this strike you as the logical result of a fair and balanced economic system? Does this look like a random happenstance? The dominant theory is ""It just happened, it\'s nobody\'s fault and nobody designed it that way and to think otherwise is very bad because it makes you a conspiracy theorist, and conspiracy theorists are nuts. You are not nuts are you?"" Look at the facts already in your possession. It didn\'t just happen. The system is rigged. When a suit typing a few numbers in a computer can make more money in 5 minutes than an average Joe can make in 100 lifetimes of honest, productive work, you don\'t have a fair economic system, you have a scam machine. When you look at a system as broken as the one we have, you shouldn\'t be asking yourself ""what makes this system right?"" What you should be asking yourself is more along the lines of ""Why is it broken? Who benefits? Why did congress turn its monetary policy over to the Federal reserve (a group of unelected and unaccountable individuals with strong ties in the banking industry) and does not even bother to conduct audits to know how your money is actually managed? This brilliant movie, Money as debt, points to a number of outrageous bugs in our economic system. Now, you can dream up reasons why the system should be the way it is and why it is an acceptable system. Or you can look at the fact and realize that there is NO JUSTIFICATION for an economic system that perform as badly as it does. Back to basics. Money is supposed to represent production. It\'s in every basic textbook on the subject of economics. So, what should money creation be based on? Debt? No. Gold? No. Randomly printed by the government when they feel like it? No (although this could actually be better than the 2 previous suggestions) Money is supposed to represent production. Index money on production and you have a sound system. Why isn\'t it done that way? Why do you think that is?"']

Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan?

["When you pay off a loan early, you pay the remaining principal, and you save all of the remaining interest. So you do save on interest, but it's the interest you would have paid in the future, not the interest you have paid in the past. (Your remaining balance when you pay off the loan only includes the principal, not the projected interest.) Interest is a factor of the amount borrowed, the interest rate and the amount of time you borrow the money. The sooner you repay the money, the less interest you pay. Imagine if you had taken a 30 year loan at 4% interest but were allowed to make no payments until the loan term ended. If you waited 15 years to make your first payment, you wouldn't owe the same money as if you'd made payments every month. No, instead of owing ~$64k, you'd owe ~$182k, because you had borrowed $100k for 15 years (plus the interest due) rather than borrowing a declining sum. So that's why you don't get a refund on interest for previous months. If you had started with a 16 year loan, then you would have been paying more principal every month, and your monthly amount due would have been higher to reflect that. As you paid the principal off faster, the interest each month would drop faster. Paying a huge portion of the principal at the end of the loan is not the same as steadily paying it down in the same time frame. You will pay a lot more interest in the former case, and rightfully so. It might help to consider a credit card payment in comparison. If you run up a balance and pay only the minimum each month, you pay a lot of interest over time, because your principal goes down slowly. If you suddenly pay off your credit card, you don't have to pay any more interest, but you also don't get any interest back for previous months. That's because the interest accrued each month is based on your current balance, just like your mortgage. The minimum payments are calculated differently, but the interest accrued each month uses essentially the same mechanism.", '"One way to think of the typical fixed rate mortgage, is that you can calculate the balance at the end of the month. Add a month\'s interest (rate times balance, then divide by 12) then subtract your payment. The principal is now a bit less, and there\'s a snowball effect that continues to drop the principal more each month. Even though some might object to my use of the word ""compounding,"" a prepayment has that effect. e.g. you have a 5% mortgage, and pay $100 extra principal. If you did nothing else, 5% compounded over 28 years is about 4X. So, if you did this early on, it would reduce the last payment by about $400. Obviously, there are calculators and spreadsheets that can give the exact numbers. I don\'t know the rules for car loans, but one would actually expect them to work similarly, and no, you are not crazy to expect that. Just the opposite."', "A few years ago I had a 5 year car loan. I wanted to prepay it after 2 years and I asked this question to the lender. I expected a reduction in the interest attached to the car loan since it didn't go the full 5 years. They basically told me I was crazy and the balance owed was the full amount of the 5 year car loan. This sounds like you either got a bad car loan (i.e. pay all the interest first before paying any principal), a crooked lender, or you were misunderstood. Most consumer loans (both car loans and mortgages) reduce the amount of interest you pay (not the _percentage) as you pay down principal. The amount of interest of each payment is computed by multiplying the balance owed by the periodic interest rate (e.g. if your loan is at 12% annual interest you'll pay 1% of the remaining principal each month). Although that's the most common loan structure, there are others that are more complex and less friendly to the consumer. Typically those are used when credit is an issue and the lender wants to make sure they get as much interest up front as they can, and can recover the principal through a repossession or foreclosure. It sounds like you got a precomputed interest loan. With these loans, the amount of interest you'd pay if you paid through the life of the loan is computed and added to the principal to get a total loan balance. You are required to pay back that entire amount, regardless of whether you pay early or not. You could still pay it early just to get that monkey off your back, but you may not save any interest. You are not crazy to think that you should be able to save on interest, though, as that's how normal loans work. Next time you need to borrow money, make sure you understand the terms of the loan (and if you don't, ask someone else to help you). Or just save up cash and don't borrow money ;)", '"So, let\'s take a mortgage loan that allows prepayment without penalty. Say I have a 30 year mortgage and I have paid it for 15 years. By the 16th year almost all the interest on the 30 year loan has been paid to the bank This is incorrect thinking. On a 30 year loan, at year 15 about 2/3\'s of the total interest to be paid has been paid, and the principal is about 1/3 lower than the original loan amount. You may want to play with some amortization calculators that are freely available to see this in action. If you were to pay off the balance, at that point, you would avoid paying the remaining 1/3 of interest. Consider a 100K 30 year mortgage at 4.5% In month two the payment breaks down with $132 going to principal, and $374 going to interest. If, in month one, you had an extra $132 and directed it to principal, you would save $374 in interest. That is a great ROI and why it is wonderful to get out of debt as soon as possible. The trouble with this is of course, is that most people can barely afford the mortgage payment when it is new so lets look at the same situation in year 15. Here, $271 would go to principal, and $235 to interest. So you would have to come up with more money to save less interest. It is still a great ROI, but less dramatic. If you understand the ""magic"" of compounding interest, then you can understand loans. It is just compounding interest in reverse. It works against you."', '"Your thinking is unfortunately incorrect; an amortising loan (as opposed to interest only loans) pay down, or amortise, the principal with each payment. This means that the amount that is owed at prepayment will always be less than the total borrowed, and is also why some providers make a charge for prepayment. The ""fairness"" arguments that you make predicated on that misunderstanding are, therefore, incorrect."', "Forget about terms. Think about loans in terms of months. To simplify things, let's consider a $1000 loan with .3% interest per month. This looks like a ten month term, but it's equally reasonable to think about it on a month-to-month basis. In the first month, you borrowed $1000 and accrued $3 interest. With the $102 payment, that leaves $901 which you borrow for another month. So on and so forth. The payoff after five payments would by $503.54 ($502.03 principal plus $1.51 interest). You'd save $2.99 in interest after paying $13.54. The reason why most of the interest was already paid is that you already did most of the borrowing. You borrowed $502.03 for six months and about $100 each for five, four, three, two, and one month. So you borrowed about $4500 months (you borrowed $1000 for the first month, $901 for the second month, etc.). The total for a ten month $1000 loan is about $5500 months of borrowing. So you've done 9/11 of the borrowing. It's unsurprising that you've paid about 9/11 of the interest. If you did this as a six month loan instead, then the payments look different. Say You borrow $1000 for one month. Then 834 for one month. So on and so forth. Adding that together, you get about $168.50 * 21 or $3538.50 months borrowed. Since you only borrow about 7/9 as much, you should pay 7/9 the interest. And if we adding things up, we get $10.54 in interest, about 7/9 of $13.54. That's how I would expect your mortgage to work in the United States (and I'd expect it to be similar elsewhere). Mortgages are pretty straight-jacketed by federal and state regulations. I too once had a car loan that claimed that early payment didn't matter. But to get rid of the loan, I made extra payments. And they ended up crediting me with an early release. In fact, they rebated part of my last payment. I saved several hundred dollars through the early release. Perhaps your loan did not work the same way. Perhaps it did. But in any case, mortgages don't generally work like you describe.", '"Loans do not carry an ""interest balance"". You can not pay off ""all the interest"". The only way to reduce the interest to zero is to pay off the loan. Otherwise, the interest due each month is some percentage of the outstanding principal. Think of it from the bank\'s perspective: they\'ve invested some amount of money in you, and they expect a return on that investment in the form of interest. If you somehow paid in 16 years all the interest the bank expected to receive in 30 years, you\'ve been scammed."', '"For the mortgage, you\'re confusing cause and effect. Loans like mortgages generally have a very simple principle behind them: at any given time, the interest charged at that time is the product of the amount still owing and the interest rate. So for example on a mortgage of $100,000, at an interest rate of 5%, the interest charged for the first year would be $5,000. If you pay the interest plus another $20,000 after the first year, then in the second year the interest charge would be $4,000. This view is a bit of an over-simplification, but it gets the basic point across. [In practice you would actually make payments through the year so the actual balance that interest is charged on would vary. Different mortgages would also treat compounding slightly differently, e.g. the interest might be added to the mortgage balance daily or monthly.] So, it\'s natural that the interest charged on a mortgage reduces year-by-year as you pay off some of the mortgage. Mortgages are typically setup to have constant payments over the life of the mortgage (an ""amortisation schedule""), calculated so that by the end of the planned mortgage term, you\'ll have paid off all of the principal. It\'s a straightforward effect of the way that interest works in general that these schedules incorporate higher interest payments early on in the mortgage, because that\'s the time when you owe more money. If you go for a 15-year mortgage, each payment will involve you paying off significantly more principal each time than with a 30-year mortgage for the same balance - because with a 15-year mortgage, you need to hit 0 after 15 years, not 30. So since you pay off the principal faster, you naturally pay less interest even when you just compare the first 15 years. In your case what you\'re talking about is paying off the mortgage using the 30-year payments for the first 15 years, and then suddenly paying off the remaining principal with a lump sum. But when you do that, overall you\'re still paying off principal later than if it had been a 15-year mortgage to begin with, so you should be charged more interest, because what you\'ve done is not the same as having a 15-year mortgage. You still will save the rest of the interest on the remaining 15 years of the term, unless there are pre-payment penalties. For the car loan I\'m not sure what is happening. Perhaps it\'s the same situation and you just misunderstood how it was explained. Or maybe it\'s setup with significant pre-payment penalties so you genuinely don\'t save anything by paying early."', "There is no interest outstanding, per se. There is only principal outstanding. Initially, principal outstanding is simply your initial loan amount. The first two sections discuss the math needed - just some arithmetic. The interest that you owe is typically calculated on a monthly basis. The interested owed formula is simply (p*I)/12, where p is the principal outstanding, I is your annual interest, and you're dividing by 12 to turn annual to monthly. With a monthly payment, take out interest owed. What you have left gets applied into lowering your principal outstanding. If your actual monthly payment is less than the interest owed, then you have negative amortization where your principal outstanding goes up instead of down. Regardless of how the monthly payment comes about (eg prepay, underpay, no payment), you just apply these two calculations above and you're set. The sections below will discuss these cases in differing payments in detail. For a standard 30 year fixed rate loan, the monthly payment is calculated to pay-off the entire loan in 30 years. If you pay exactly this amount every month, your loan will be paid off, including the principal, in 30 years. The breakdown of the initial payment will be almost all interest, as you have noticed. Of course, there is a little bit of principal in that payment or your principal outstanding would not decrease and you would never pay off the loan. If you pay any amount less than the monthly payment, you extend the duration of your loan to longer than 30 years. How much less than the monthly payment will determine how much longer you extend your loan. If it's a little less, you may extend your loan to 40 years. It's possible to extend the loan to any duration you like by paying less. Mathematically, this makes sense, but legally, the loan department will say you're in breach of your contract. Let's pay a little less and see what happens. If you pay exactly the interest owed = (p*I)/12, you would have an infinite duration loan where your principal outstanding would always be the same as your initial principal or the initial amount of your loan. If you pay less than the interest owed, you will actually owe more every month. In other words, your principal outstanding will increase every month!!! This is called negative amortization. Of course, this includes the case where you make zero payment. You will owe more money every month. Of course, for most loans, you cannot pay less than the required monthly payments. If you do, you are in default of the loan terms. If you pay more than the required monthly payment, you shorten the duration of your loan. Your principal outstanding will be less by the amount that you overpaid the required monthly payment by. For example, if your required monthly payment is $200 and you paid $300, $100 will go into reducing your principal outstanding (in addition to the bit in the $200 used to pay down your principal outstanding). Of course, if you hit the lottery and overpay by the entire principal outstanding amount, then you will have paid off the entire loan in one shot! When you get to non-standard contracts, a loan can be structured to have any kind of required monthly payments. They don't have to be fixed. For example, there are Balloon Loans where you have small monthly payments in the beginning and large monthly payments in the last year. Is the math any different? Not really - you still apply the one important formula, interest owed = (p*I)/12, on a monthly basis. Then you break down the amount you paid for the month into the interest owed you just calculated and principal. You apply that principal amount to lowering your principal outstanding for the next month. Supposing that what you have posted is accurate, the most likely scenario is that you have a structured 5 year car loan where your monthly payments are smaller than the required fixed monthly payment for a 5 year loan, so even after 2 years, you owe as much or more than you did in the beginning! That means you have some large balloon payments towards the end of your loan. All of this is just part of the contract and has nothing to do with your prepay. Maybe I'm incorrect in my thinking, but I have a question about prepaying a loan. When you take out a mortgage on a home or a car loan, it is my understanding that for the first years of payment you are paying mostly interest. Correct. So, let's take a mortgage loan that allows prepayment without penalty. If I have a 30 year mortgage and I have paid it for 15 years, by the 16th year almost all the interest on the 30 year loan has been paid to the bank and I'm only paying primarily principle for the remainder of the loan. Incorrect. It seems counter-intuitive, but even in year 16, about 53% of your monthly payment still goes to interest!!! It is hard to see this unless you try to do the calculations yourself in a spreadsheet. If suddenly I come into a large sum of money and decide I want to pay off the mortgage in the 16th year, but the bank has already received all the interest computed for 30 years, shouldn't the bank recompute the interest for 16 years and then recalculate what's actually owed in effect on a 16 year loan not a 30 year loan? It is my understanding that the bank doesn't do this. What they do is just tell you the balance owed under the 30 year agreement and that's your payoff amount. Your last sentence is correct. The payoff amount is simply the principal outstanding plus any interest from (p*I)/12 that you owe. In your example of trying to payoff the rest of your 30 year loan in year 16, you will owe around 68% of your original loan amount. That seems unfair. Shouldn't the loan be recalculated as a 16 year loan, which it actually has become? In fact, you do have the equivalent of a 15 year loan (30-15=15) at about 68% of your initial loan amount. If you refinanced, that's exactly what you would see. In other words, for a 30y loan at 5% for $10,000, you have monthly payments of $53.68, which is exactly the same as a 15y loan at 5% for $6,788.39 (your principal outstanding after 15 years of payments), which would also have monthly payments of $53.68. A few years ago I had a 5 year car loan. I wanted to prepay it after 2 years and I asked this question to the lender. I expected a reduction in the interest attached to the car loan since it didn't go the full 5 years. They basically told me I was crazy and the balance owed was the full amount of the 5 year car loan. I didn't prepay it because of this. That is the wrong reason for not prepaying. I suspect you have misunderstood the terms of the loan - look at the Variable Monthly Payments section above for a discussion. The best thing to do with all loans is to read the terms carefully and do the calculations yourself in a spreadsheet. If you are able to get the cashflows spelled out in the contract, then you have understood the loan.", '"If you take a loan, you make a contract with your lender, let\'s call them ""bank"" (even if it might not be a real bank). This loan contract contains an agreed-upon way of paying back the loan. Both sides agreed upon these conditions. Any change of it (like paying back early) needs the consent of both sides. So, in general, no, you cannot just pay back everything earlier unless the other side accepts this change of the contract. Consider it from the bank\'s point of view: They want to earn money by getting the interest you have to pay when you pay back everything nice and slowly. It is their business. They plan on these expected revenues etc. So if, for whatever reason, you have to pay back the whole remaining loan at once, you create a revenue loss for the bank and are liable for this financial damage. In German the term for this is ""Vorfälligkeitsentschädigung"" which translates to ""prepayment penalty"" or ""acceleration fee"". You just have to pay it, so in the end you come out like if you were paying back the loan in the agreed-upon fashion. However, many loan contracts contain the option to pay back early at specific points in time in specific amounts and under specific conditions."', "The key to understanding a mortgage is to look at an amortization schedule. Put in 100k, 4.5% interest, 30 years, 360 monthly payments and look at the results. You should get roughly 507 monthly P&I payment. Amortization is only the loan portion, escrow for taxes and insurance and additional payments for PMI are extra. You'll get a list of all the payments to match the numbers you enter. These won't exactly match what you really get in a mortgage, but they're close enough to demonstrate the way amortization works, and to plan a budget. For those terms, with equal monthly payments, you'll start paying 74% interest from the first payment. Each payment thereafter, that percentage drops. The way this is all calculated is through the time value of money equations. https://en.wikipedia.org/wiki/Time_value_of_money. Read slowly, understand how the equations work, then look at the formula for Repeating Payment and Present Value. That is used to find the monthly payment. You can validate that the formula works by using their answer and making a spreadsheet that has these columns: Previous balance, payment, interest, new balance. Each line represents a month. Calculate interest as previous balance * APR/12. Calculate new balance as previous balance minus payment plus interest. Work through all this for a 1 year loan and you will understand a lot better.", "You are expecting, that if you pay off a 30 mortgage after 16 years, you should be charged the same amount of interest as someone who had a 16 year mortgage for the same amount and with the same interest rate. This isn't correct, and here's why: the person with the 16 year mortgage paid it off faster than you. They paid more each month and the size of their loan shrunk faster than yours. After 15 years they had paid off a LOT more than you. You paid a lump sum after 16 years, but at this point, the extra money which they had paid had been in the banks hands for a long time. You caught up with them then, but you had been behind them for all of the previous years. On the other hand, you owed the same amount in each of those years as the person who took out a 30 year mortgage and didn't prepay. Therefore you paid the same amount of interest as this person, not the first person. If you could arrange in advance a loan where you made the same payment as you did for 16 years, then paid the balance in a lump sum, then you would have paid exactly what you did.", '"You seem to think that you are mostly paying interest in the first year because of the length of the loan period. This is skipping a step. You are mostly paying interest in the first year because your principle (the amount you owe) is highest in the first year. You do pay down some principle in that first year; this reduces the principle in the second year, which in turn reduces the interest owed. Your payments stay the same; so the amount you pay to principle goes up in that second year. This continues year after year, and eventually you owe almost no interest, but are making the same payments, so almost all of your payment goes to principle. It is a bit like ""compounded interest"", but it is ""compounded principle reduction""; reducing your principle increases the rate you reduce it. As you didn\'t reduce your principle until the 16th year, this has zero impact on the interest you owed in the first 15 years. Now, for actual explicit numbers. You owe 100,000$ at 3% interest. You are paying your mortgage annually (keeps it simpler) and pay 5000$ per year. The first year you put 3000$ against interest and 2000$ against principle. By year 30, you put 145$ against interest and 4855$ against principle. because your principle was tiny, your interest was tiny."']

Why do card processing companies discourage “cash advance” activities

['"This is most likely protecting Square\'s relationship with Visa/Mastercard/AMEX/etc. Credit card companies typically charge their customers a much higher interest rate with no grace period on cash advances (withdrawals made from an ATM using a credit card). If you use Square to generate something that looks like a ""merchandise transaction"" but instead just hand over a wad of banknotes, you\'re forcing the credit card company to apply their cheaper ""purchases"" interest rate on the transaction, plus award any applicable cashback offers†, etc. Square would absolutely profit off of this, but since it would result in less revenue for the partner credit card companies, that would quickly sour the relationship and could even result in them terminating their agreements with Square altogether. † This is the kind of activity they are trying to prevent: 1. Bill yourself $5,000 for ""merchandise"", but instead give yourself cash. 2. Earn 1.5% cashback ($75). 3. Use $4,925 of the cash and a $75 statement credit to pay your credit card statement. 4. Pocket the difference. 5. Repeat. Note, the fees involved probably negate any potential gain shown in this example, but I\'m sure with enough creative thinking someone would figure out a way to game the system if it wasn\'t expressly forbidden in the terms of service"', "Square does not care if you run a $10 transaction to test the system. They are concerned with its use to move meaningful amounts of money. The only people who do this will be the Dunning-Kruger gang, who only think they are clever. Because of course Square will hunt them down, sue, garnish and/or prosecute them! But the expense of doing so is all on Square, making it a total lose. The cheapest resolution is to not let it happen in the first place. The ~3% cash advance fees, lack of rewards points, and the higher interest rate are not just for profiteering. They reflect, and pay for, the higher risk of loaning money via cash advance: to put it indelicately, the risk of default. Cash advance credit limits are often much lower than purchase limits. If a merchant is selling himself phantom merchandise to get easy cash advances, it means he is not using regular ways of borrowing money. Perhaps because he can't, because he has exhausted his other opportunities to borrow, risk managers have cut him off. Square has no reason to care either way; but the issuing bank does, and through Visa etc., they will disallow this behavior. ** PayPal Here's rate used here instead of Square's, to simplify math.", '"Square charges a 2.75% fee (which the merchant pays), so you would be losing money if you only got a 1.5% cashback bonus. I would guess that the real reason Square prohibits you from getting cash is because of Visa/MC, state and federal regulations. Visa/MC probably prohibit it for regular merchants due primarily to laws that are designed to prevent money-laundering. Certain merchants (like casinos) are allowed to give you cash advances against a credit card, but regular merchants are not allowed to do this. It is much more difficult to get Visa/MC to approve merchants to handle cash advances and they are subject to many additional regulations. Services like Western Union will let you send cash with a regular credit card, but they are classified as ""money transmitters"" and must comply with additional state and federal regulations. If Square were to allow cash advances, this would likely subject them to a bunch of additional regulations. It would cost them more to comply with these regulations and is outside their business model, so they simply prohibit it."', 'I thought this was because credit card companies charge the retailer a fee to accept credit card payments. If you spend $100, the retailer pays $1 (or whatever percentage they have negotiated) to the credit card provider. Handing over $100 cash and paying $1 fee to Visa means a loss to the retailer. The same transaction on $100 worth of product means the loss is accepted out of the profit margin which the retailer accepts to attract custom.']

What is the difference between a check and a paycheck?

['"A paycheck is simply a check for your salary. It\'s just like a rent check, or a birthday check, or a grocery check... I\'ve had ""paychecks"" that were personal checks from the owner of the business, I\'ve had ones that are printed in the office I worked in and signed right there, and I\'ve had paychecks that are printed through a third party company and mailed to me (my favorite, of course, is to forgo the ""paycheck"" entirely and get direct deposit :) ). Really, they\'re all just checks. Although that\'s a little disingenuous, because banks are often slightly more trusting of paychecks. However, this has little to do with it being a ""paycheck,"" per se, and more to do with the fact that they see you getting the same check for (roughly) the same amount on a regular basis; having seen you get a paycheck for the same amount from the same company for the last 12 months, there is less risk of the check bouncing or being returned unpaid, so you can often get banks to waive their hold policy and just give you the money."', 'There is little difference. A paycheck is a type of check used to pay wages. These days many people opt for direct deposit. So, the term paycheck can also refer to the payment itself: 1: a check in payment of wages or salary 2: wages, salary http://www.merriam-webster.com/dictionary/paycheck']

What's the process to buy an old house to tear it down and create a new one?

["By process, I assume you mean the financial process. Financially, this doesn't look any different to me than buying an empty lot to build a rental unit, with the added expense (potentially significant) of doing the tear-down. Given your lack of experience and capital, I would be very hesitant to jump in like this. You are going to have to spend a lot of time managing the build process, or pay someone else to do it for you. And expect everything to take twice as long and cost twice as much as you expect. If you really want to get into the landlord business, I would suggest starting with a structurally sound building that needs some renovation work and start there. One you have that up and running, you can use the cash flow and equity to finance something more aggressive. If you still think you want to do this, the first thing to do is figure out if the financials make sense. How much will it cost to do the tear-down and rebuild, plus the typical rental expenses:ongoing maintenance, taxes, insurance, vacancy rates and compare that to the expected rental rates in the area to see how long it will take to 1) achieve a positive cash flow, and 2) break even. There are a lot of good questions on this site related to rentals that go into much more detail about how to approach this.", "Thank you for your response KeithB and Ross. I was researching more about this and looks like I have to follow all these steps (please, correct me if I'm wrong):"]

How to take advantage of home appreciation

['"Assuming ""take advantage"" means continue to build wealth, as opposed to blow it all on a fancy holiday... Downgrade As you already note, you could downgrade/downsize. This could happen via moving to a smaller house in the same area, or moving to an area where the cost of buying is less. HELOC Take out a Home Equity Line of Credit. You could use the line of credit to do home improvements further boosting the asset value (forced appreciation, assuming the appreciation to date is simply market based). Caution is required if the house has already appreciated ""considerably"" - you want to keep the home value within tolerance levels for the area. (Best not to have the only $300K house on a street of $190K-ers...) Home Equity Loan Assuming you have built up equity in the house, you could leverage that equity to purchase another property. For most people this would form part of the jigsaw for getting the financing to purchase again."', '"There are basically two ways to get value out of an appreciating asset such as a home: (a) Sell it and take the profit. In the case of a home, you presumably still have to live somewhere, so unless you buy a cheaper home to replace it, this doesn\'t get you anywhere. If you can get another house that is just as nice and in just as nice a location -- whatever you consider ""nice"" to be -- than this sounds like a winning option. If it means moving to a less desirable home, then you are getting the cash but losing the nice home. You\'ll have to decide if it\'s worth it. (b) Use it as collateral for a loan. In this case, that means a second mortgage, home equity loan, or a home equity line of credit. But this can be dangerous. House prices are very volatile these days. If the value of the house falls, you could be stuck with debts greater than your assets. In my humble opinion, you should be very careful about doing this. Borrowing against your house to send the kids to college or pay for your spouse\'s life-saving operation may be reasonable. Borrowing against your house to go on a fancy vacation is almost surely a bad idea. The vacation will be over within a couple of weeks, but you could be paying off the debt for decades."', "There might just not be anything useful for you to do with that 'value'. As others mentioned, HELOCs have their risks and issues too. There is no risk-less way to take advantage of the value (outside of selling) It is similar to owning a rare stamp that is 'worth a million' - what good does it do you if you don't sell it? nothing. It is just a number on a sheet of paper, or even only on some people's minds.", "Even selling isn't riskless. Sure, your house has gained value-- but unless that's due to improvements you made to it, every other house in the neighborhood you might buy has gained value too, so moving might not result in extracting any net value. This is one of the reasons I keep reminding folks that a house is not an investment. It can be a business, if you're renting it out. But if you're occupying it, it is simply housing. If you are lucky you'll make a profit if and when you sell it, but don't count on that. It does store value, but except for taking loans against that it's had to access that value. And lower loan rates than you'd otherwise pay are not a huge value when you'd save more if you don't borrow at all. The only use I'm making of my house's value is that by taking a very-low-rate mortgage when I could have paid cash I was able to leave more money in my investments -- arguably the safest leveraged investment possible."]

Got charged ridiculous amount for doctor's walk in visit. What are my options?

["You should start by calling the clinic and asking them to tell you how the visit was coded. Some clinics have different billing codes based on the complexity of the visit. If you have one thing you are seeing the doctor about, that could be coded differently than if you have 4 things you are seeing the doctor about. In fact, even if you are there just for one ailment, but while you are there you happen to ask a few quick questions about other possible ailments, the doctor could decide to use the billing code for the higher complexity. If when speaking to the billing department it is determined that the visit is using a higher complexity billing code (and a higher charge as a result), you could then request that it be re-coded with the lower complexity visit. Realize if you request that they will probably have to first get approval from the doctor that saw you. Note: I am basing this answer on first hand experience about 6 months ago in Illinois, where the situation I described happened to me because I asked some unrelated questions about other possible ailments at the end of a visit to an after hours clinic. The billing department explained that my visit was coded for 4 issues. (3 of them were quick questions I asked about at the end of the visit, one of which she referred me to another doctor. My additional questions probably extended the visit by 3-4 minutes.) In my case I never got the bill reduced, mainly due to my own laziness and my knowing that I would hit my deductible anyway this year. Of course I can't say for sure if this is what happened in your case, or even if this practice is widespread. This was the first and only time in my life that I encountered it. As a side note, your primary doctor would likely rarely ever bill you for a more complex visit, as it likely wouldn't lead to much repeat business. As for your last question regarding your credit: if the provider decides to lower the price, and you pay the lower price, this in no way can affect your credit. Surprising Update: When I called the billing office months ago, I had asked if they could confirm the code with the doctor, and I was told they would look into it. I never heard back, never followed up, and assumed that was the end of it. Well, today I got a call back (months later) and was informed that they had re-coded the visit which will result in a lower charge! It's still pending the insurance adjustment but at some point in the future I expect to receive either a credit on my next statement or a check in the mail. (The price difference pre-insurance in my case has gone from $359 to $235.) Update: I did receive a check for the difference. The check was dated July 20, 2016, which is just over 2 months after the phone call informing me I would receive it.", "Some doctors will give folks who are not covered by insurance a price break. If that describes you, you could ask. But if you didn't discuss the price in advance, that isn't the doctor's fault, any more than it would be the mechanic's fault if you asked for auto service without getting an estimate first. Consider it a cheap lesson in not making assumptions.", "If you are disputing the size of the charge for specific services, like you think that they overcharged for lab work, you can try disputing it with the business office staff at the doctor's office. If, on the other hand, you just think that the overall bill is too expensive then you really only have one option. You can ask if they will reduce the bill for you. Most hospitals and clinics I've dealt with have programs set up for this, but you usually access them by filling out paperwork demonstrating financial hardship (along with supporting documents). It never hurts to ask. But with the services already rendered the only person with an interest in reducing the bill is you. The reduction, if any, will probably depend on what the clinic thinks your ability to pay is compared with the cost to them of pursuing you for payment, as well as the amount of funding they have for bill reduction. When I worked in the financial services office of a hospital a $400 bill would not even have been reviewed for discounting-- the balance would be too low to devote staff time to reviewing. It's frustrating, and even asking in advance might not have given you accurate (or any!) information on what the cost of the visit would be, so your ability to shop around is limited. Unfortunately, that doesn't give you any additional options in this case.", "To answer the specific question of whether you can get the bill reduced without hurting your credit, yes, as long as the bill never goes to collections, there's no reason it should ever show up on your credit report. Will they reduce your bill without sending it to collections first? Maybe. All you can do is ask.", "You will often receive a lower bill if you simply wait for a second or third billing statement. I was once given the advice to never pay a medical bill until after they had sent three notices, because they will almost certainly reduce the amount due. Sounds crazy, right? I have excellent credit, so the idea of risking it by ignoring bills disturbed me greatly, and I scoffed at the advice. I then had a similar experience to you, and decided to take the advice. By the third statement, the bill was reduced to less than half of the original, with zero intervention on my part. I then paid it without any impact to my credit whatsoever. I've since done that every time I receive healthcare services, and the bill is always reduced on subsequent statements, generally to less than half of the original bill. Sometimes it's because insurance finally got around to paying. Sometimes a credit is mysteriously added. Sometimes line items disappear without explanation. (Line items sometimes appear over time, too, but the overall balance generally goes down.) I don't know the reason for it, but it works. This has happened with a variety of providers, so it's not just one company that does it. Granted, I never called to negotiate the price, so I can't say if I would've gotten a better deal by doing that. I like it because it requires no time or effort on my part, and it has greatly reduced my medical bills with zero impact to my credit. I only have personal anecdotes to back it up, but it's worked for me."]

Are parking spaces and garage boxes a good investment?

['If the company that owns the lot is selling them it is doing so because it feels it will make more money doing so. You need to read carefully what it is you are getting and what the guarantees are from the owner of the property and the parking structure. I have heard from friends in Chicago that said there are people who will sell spaces they do not own as a scam. There are also companies that declare bankruptcy and go out of business after signing long term leases for their spots. They sell the lot to another company(which they have an interest in) and all the leases that they sold are now void so they can resell the spots. Because of this if I were going to invest in a parking space, I would make sure: The company making the offer is reputable and solvent Check for plans for major construction/demolition nearby that would impact your short and long term prospects for rent. Full time Rental would Recoup my investment in less than 5 years. Preferably 3 years. The risk on this is too high for me with out that kind of return.', '15 years ago I bought a beach condo in Miami for $400,000 and two extra parking spaces for $3000 each. Today the condo is worth 600,000 but the rent barely covers mortgage repairs and property taxes. Most of The old people in the building have since died and are now replaced with families with at least two cars and spots are in short supply. I turned down offers of 25,000 for each parking space. I have the spaces rented out for $200 per month no maintenance for an 80% annual return on my purchase price and the value went has gone up over $700%. And no realtors commissions if i decide to sell the spaces.', '"No no no no!!!! Do not spend 25k on a damn slab of concrete when you don\'t even own the land! You are not ""truly"" the owner unless you legally own the land. I don\'t care what country your talking about. If you like I\'ll come over to your place, mix and pour some concrete on the floor, and you can pay me 5 euro. Deal? Buy the smallest parcel of land you can find. Own the land. Pour some concrete on it and viola!!!"', '"In Italy (even with taxes that are more than 50% on income) owning garages is generally a good business, as you said: ""making money while you sleep"", because of no maintainance. Moreover garages made by real concrete (and not wood like in US) are still new after 50 years, you just repaint them once every 20 years and you change the metal door gate once every 30 years. After 20 years you can be sure the price of the garage will be higher than what you paied it (at least for the effect of the inflation, after 20 years concrete and labour work will cost more than today). The only important thing before buying it is to make sure it is in an area where people are eager to rent it. This is very common in Italian cities\' downtown because they were built in dark ages when cars did not exists, hence there are really few available parkings."']

Why would a public company not initiate secondary stock offerings more often?

["Selling stock means selling a portion of ownership in your company. Any time you issue stock, you give up some control, unless you're issuing non-voting stock, and even non-voting stock owns a portion of the company. Thus, issuing (voting) shares means either the current shareholders reduce their proportion of owernship, or the company reissues stock it held back from a previous offering (in which case it no longer has that stock available to issue and thus has less ability to raise funds in the future). From Investopedia, for exmaple: Secondary offerings in which new shares are underwritten and sold dilute the ownership position of stockholders who own shares that were issued in the IPO. Of course, sometimes a secondary offering is more akin to Mark Zuckerberg selling some shares of Facebook to allow him to diversify his holdings - the original owner(s) sell a portion of their holdings off. That does not dilute the ownership stake of others, but does reduce their share of course. You also give up some rights to dividends etc., even if you issue non-voting stock; of course that is factored into the price presumably (either the actual dividend or the prospect of eventually getting a dividend). And hopefully more growth leads to more dividends, though that's only true if the company can actually make good use of the incoming funds. That last part is somewhat important. A company that has a good use for new funds should raise more funds, because it will turn those $100 to $150 or $200 for everyone, including the current owners. But a company that doesn't have a particular use for more money would be wasting those funds, and probably not earning back that full value for everyone. The impact on stock price of course is also a major factor and not one to discount; even a company issuing non-voting stock has a fiduciary responsibility to act in the interest of those non-voting shareholders, and so should not excessively dilute their value.", 'What prevents a company from doing secondary public stock offerings on regular basis? The primary goal of a company doing secondary public offering is to raise more funds, that can be utilized for funding the business. If no funding is needed [i.e. company has sufficient funds, or no expansion plans], this funding creates a drag and existing shareholder including promoters loose value. For example with the current 100 invested, the company is able to generate say 125 [25 as profit]. If additional 100 is taken as secondary public offering, then with 200, the company should mark around 250, else it looses value. So if the company took additional 100 and did not / is not able to deploy in market, on 200 they still make 25 as profit, its bad. There are other reasons, i.e. to fight off hostile acquisition or dilute some of promoters shares etc. Thus the reasons for company to do a secondary PO are few and doing it often reduces the value for primary share holders as well as minority share holders.']

How To Assign Payments Received Properly In GnuCash?

['"When I receive a check from a customer whom I previously sent an invoice, I go to the customer report for that customer, click on the link ""Invoice"" for that invoice, then click on the Pay Invoice button (very far right side). I then do a customer report and see that there is no balance (meaning all the invoices have been paid). I don\'t process invoices using the same method you do. Instead I go to Business -> Customer -> Process Payment. From there I can select the applicable customer, and a list of unpaid invoices will come up. I\'ve never experienced the issue you\'ve described. On a related topic: are you posting your invoices? From experience that has caused issues for me; when you post the invoice it should show up in your Accounts Receivable (or whichever account you\'ve designated), and after you process the payment the A/R should go down accordingly. When posting your invoice, you specify which account it gets posted to: So that account should show a balance once you have posted it: Then, when a client pays you, your cash will go up, and A/R will go down."']

Will my Indian debit card work in the U.S.?

["Debit cards with the Visa or Mastercard symbol on them work technically everywhere where credit cards work. There are some limitations where the respective business does not accept them, for example car rentals want a credit card for potential extra charges; but most of the time, for day-to-day shopping and dining, debit cards work fine. However, you should read up the potential risks. A credit card gives you some security by buffering incorrect/fraudulent charges from your account, and credit card companies also help you reverse incorrect charges, before you ever have to pay for it. If you use a debit card, it is your money on the line immediately - any incorrect charge, even accidential, takes your money from your account, and it is gone while you work on reversing the charge. Any theft, and your account can be cleaned out, and you will be without money while you go after the thief. Many people consider the debit card risk too high, and don't use them for this reason. However, many people do use them - it is up to you.", "I recommend that you first try to use your card at a store in your home country, just to make sure that the point-of-sale features are enabled. After you've verified that, you need to contact your bank and ask them if the card will work in both ATMs and in stores in the U.S. They may need to enable it to work in another country. If you are going to be living in the U.S. for a while, you should consider opening an American bank account after you get there. If you don't want a credit card, you should be able to get a debit card here.", "Whether your card will work, I believe, depends on the institution that issued it. You'll just have to try. What I can tell you, is that the process of using a debit card or credit card in the US is fairly straight forward. If your card has a chip, you'll 'insert' your card, chip end first, into the bottom slot of the reader, assuming the reader has one. This technology is still being distributed / accepted, so you may encounter some areas where they don't have this, or they have an insert or sign that says something along the lines of 'No chip reader / swipe instead'. If your card doesn't have a chip, which looks like the bottom end of a cellular phone's SIM card, you just swipe your card in the reader. There will / may be on-screen prompts, which will explain any additional input necessary from you. Depending on how they 'process' your card - As a debit card or credit card (They can 'process' a debit card as if it's a standard credit card), you may or may not be asked to enter your debit card's PIN. If they process it as debit, you'll have to enter your PIN. If they process it as if it were a credit card, it will still go through but you'll be asked to sign the receipt. IMPORTANT FOR YOU TO NOTE: You need to find out whether your card issuer will charge you foreign transaction fees when you use your Indian debit card in the US. Is the card carrying a different currency than the US?", "You can use the debit card for practically any purchase that you make. You'll have to take the usual precautions and then a few additional ones. Cards make your life really easy and convenient with some basic precautions. All the best for your travel and stay in the USA. My two cents."]

How to read a balance sheet to determine if a company has enough money to keep paying their employees?

['"I heard today while listening to an accounting podcast that a balance sheet... can be used to determine if a company has enough money to pay its employees. The ""money"" that you\'re looking at is specifically cash on the balance sheet. The cash flows document mentioned is just a more-finance-related document that explains how we ended at cash on the balance sheet. ...even looking for a job This is critical, that i don\'t believe many people look at when searching for a job. Using the ratios listed below can (and many others), one can determine if the business they are applying for will be around in the next five years. Can someone provide me a pair of examples (one good)? My favorite example of a high cash company is Nintendo. Rolling at 570 Billion USD IN CASH ALONE is astonishing. Using the ratios we can see how well they are doing. Can someone provide me a pair of examples (one bad)? Tesla is a good example of the later on being cash poor. Walk me though how to understand such a document? *Note: This question is highly complex and will take months of reading to fully comprehend the components that make up the financial statements. I would recommend that this question be posted completely separate."']

What are the advantages and disadvantages of leasing out a property or part of a property (such as a basement apartment)?

['"The obvious advantage is turning your biggest liability into an income-generating asset. The downside are: (1), you have to find tenants (postings, time to show the place, credit/background check, and etc) (2), you have to deal with tenants (collection of rent, repairs of things that broke by itself, complaints from neighbors, termination, and etc) (3), you have to deal with the repairs In many ways, it\'s no different from running another (small) business, so it all boils down to how much time you are willing to invest and how handy you are in doing reno\'s and/or small repairs around the house. For profitability/ROI analysis, you want to assume collection of 11 months of rent per year (i.e. assume tenant doesn\'t renew after year, so you have the worst case scenario) and factor in all the associated expense (be honest). Renting out a second property is a bit tricky as you often have to deal with a large operating expense (i.e. mortgage), and renting a basement apartment is not bad financially and you will have to get used to have ""strangers"" downstairs."', '"It doesn\'t make a lot of sense to buy a house/condo and rent it out now. On the other hand, I think finishing your basement and then renting it out is an excellent idea. The ROR is excellent as long as you can deal with the ""strangers"" in the basement, have the extra driveway space and negative association with renting out your basement. HTH"', "Complexity has mentioned some good points. I'd also like to add on the downsides: It's not that easy to get rid of a tenant! Imagine if your tenant passed your background check with flying colors but then turned out to be the tenant from hell... How would you resolve the situation? If the thought of that kind of situation stresses you (it would stress me!), I would consider carefully whether you really want to be a landlord."]

How do I enter Canadian tax info from US form 1042-S and record captial gains from cashing in stock options?

["I can't give you a specific answer because I'm not a tax accountant, so you should seek advice from a tax professional with experience relevant to your situation. This could be a complicated situation. That being said, one place you could start is the Canada Revenue Agency's statement on investment income, which contains this paragraph: Interest, foreign interest and dividend income, foreign income, foreign non-business income, and certain other income are all amounts you report on your return. They are usually shown on the following slips: T5, T3, T5013, T5013A To avoid double taxation, Canada and the US almost certainly have a foreign tax treaty that ensures you are only taxed in your country of residence. I'm assuming you're a resident of Canada. Also, this page states that: If you received foreign interest or dividend income, you have to report it in Canadian dollars. Use the Bank of Canada exchange rate that was in effect on the day you received the income. If you received the income at different times during the year, use the average annual exchange rate. You should consult a tax professional. I'm not a tax professional, let alone one who specializes in the Canadian tax system. A professional is the only one you should trust to answer your question with 100% accuracy.", 'There are two parts in this 1042-S form. The income/dividends go into the Canada T5 form. There will be credit if 1042-S has held money already, so use T2209 to report too.', 'Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit.']

What does Capital Surplus mean?

['"I think it\'s easiest to illustrate it with an example... if you\'ve already read any of the definitions out there, then you know what it means, but just don\'t understand what it means. So, we have an ice cream shop. We started it as partners, and now you and I each own 50% of the company. It\'s doing so well that we decide to take it public. That means that we will be giving up some of our ownership in return for a chance to own a smaller portion of a bigger thing. With the money that we raise from selling stocks, we\'re going to open up two more stores. So, without getting into too much of the nitty gritty accounting that would turn this into a valuation question, let\'s say we are going to put 30% of the company up for sale with these stocks, leaving you and me with 35% each. We file with the SEC saying we\'re splitting up the company ownership with 100,000 shares, and so you and I each have 35,000 shares and we sell 30,000 to investors. Then, and this depends on the state in the US where you\'re registering your publicly traded corporation, those shares must be assigned a par value that a shareholder can redeem the shares at. Many corporations will use $1 or 10 cents or something nominal. And we go and find investors who will actually pay us $5 per share for our ice cream shop business. We receive $150,000 in new capital. But when we record that in our accounting, $5 in total capital per share was contributed by investors to the business and is recorded as shareholder\'s equity. $1 per share (totalling $30,000) goes towards actual shares outstanding, and $4 per share (totalling $120,000) goes towards capital surplus. These amounts will not change unless we issue new stocks. The share prices on the open market can fluctuate, but we rarely would adjust these. Edit: I couldn\'t see the table before. DumbCoder has already pointed out the equation Capital Surplus = [(Stock Par Value) + (Premium Per Share)] * (Number of Shares) Based on my example, it\'s easy to deduce what happened in the case you\'ve given in the table. In 2009 your company XYZ had outstanding Common Stock issued for $4,652. That\'s probably (a) in thousands, and (b) at a par value of $1 per share. On those assumptions we can say that the company has 4,652,000 shares outstanding for Year End 2009. Then, if we guess that\'s the outstanding shares, we can also calculate the implicit average premium per share: 90,946,000 ÷ 4,652,000 == $19.52. Note that this is the average premium per share, because we don\'t know when the different stocks were issued at, and it may be that the premiums that investors paid were different. Frankly, we don\'t care. So clearly since ""Common Stock"" in 2010 is up to $9,303 it means that the company released more stock. Someone else can chime in on whether that means it was specifically a stock split or some other mechanism... it doesn\'t matter. For understanding this you just need to know that the company put more stock into the marketplace... 9,303 - 4,652 == 4,651(,000) more shares to be exact. With the mechanics of rounding to the thousands, I would guess this was a stock split. Now. What you can also see is that the Capital Surplus also increased. 232,801 - 90,946 == 141,855. The 4,651,000 shares were issued into the market at an average premium of 141,855 ÷ 4,651 == $30.50. So investors probably paid (or were given by the company) an average of $31.50 at this split. Then, in 2011 the company had another small adjustment to its shares outstanding. (The Common Stock went up). And there was a corresponding increase in its Capital Surplus. Without details around the actual stock volumes, it\'s hard to get more exact. You\'re also only giving us a portion of the Balance Sheet for your company, so it\'s hard to go into too much more detail. Hopefully this answers your question though."', 'Capital surplus is used to account for that amount which a firm raises in excess of the par value (nominal value) of the shares (common stock).. Investopedia has a much simpler answer. Somebody has tried to be smart on wikipedia and have done the calculations without much explanation. The portion of the surplus of a business arising from sources other than earnings : all surplus other than earned surplus usually including amounts received from sale or exchange of capital stock in excess of par or stated value, profits on resale of treasury stock, donations to capital by stockholders or others, or increment arising from revaluation of fixed or other assets The number of shares a company wants to issue is decided and agreed with the regulators. They decide the par value and then decide how much premium will be charged, extra money above the par value. Take out any RHP of an issue and you find all these details. Par Value = 1 Issue price(Price at which investors buy) = 10 Premium = 9 For a single share the capital surplus is 9, multiply it by the number of shares issued and you have the total capital surplus.']

Why would a tender offer be less than the market price?

['"Rational shareholders wouldn\'t accept such an offer. The company making the offer is simply trying to get a deal with questionable — though not illegal — tactics. Your answer is actually in the link you provided. Quoting from the fourth paragraph [emphasis is mine]: The SEC has cautioned investors about mini-tender offers, noting that ""[s]ome bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price."" The SEC\'s tips for investors regarding mini-tender offers may be found on the SEC\'s Web site at http://www.sec.gov/investor/pubs/minitend.htm. There\'s a lot more information at the SEC web page mentioned. One part I\'ll highlight from the SEC web page mentions another reason for a mini-tender: Investors need to scrutinize mini-tender offers carefully. Some bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price. Others make mini-tender offers at a premium – betting that the market price will rise before the offer closes and then extending the offer until it does or improperly canceling if it doesn\'t. You\'ll also find a lot more information at Wikipedia - Mini-tender offer."', "As an addition to Chris Rea's excellent answer, these tender offers are sometimes made specifically to cast doubt on the current market price. For instance, a large public company that contracts with a smaller supplier or service company, also public, might make a tender offer below market price. The market will look at this price and the business relationship, and wonder what the larger company knows about the smaller one that they don't. Now, what happens when investors lose confidence in a stock? They sell it, supply goes up, demand goes down, and the price drops. The company making the tender offer can then get its shares either way; directly via the offer, or on the open market. This is, however, usually not successful beyond the very short term, and typically only works because the company making a tender offer is the 800-pound gorilla, which can dictate its own terms with practically anyone else it meets. Such offers are also very closely watched by the SEC; if there's any hint that the larger company is acting in a predatory manner, or that its management is using the power and information of the company to profit themselves, the strategy will backfire as the larger company finds itself the target of SEC and DoJ legal proceedings."]

How do you get out of a Mutual Fund in your 401(k)?

['One of the strengths of 401K accounts is that you can move from investment X in the program to investment Y in the program without tax consequences. As you move through your lifetime you will tend to want to lower risk by investing in funds that are less aggressive. The only way this works is if there is an ability to move funds. If there were only one or two funds to pick from or that you were locked in to your initial choices that would be a very poor 401K to be enrolled in. On your benefits/401K website you should be able to adjust three sets of numbers: Some have you enter the current money as a percentage others allow you to enter it in dollars. They might limit the number of changes you can do in a month to the current money balances to avoid the temptation to try and time the market. These changes usually happen within 1 business day. Regarding new and match money they could limit the lowest non zero percent to 5% or 10%, but they might allow numbers as low as 1%. These changes take place generally with the next paycheck.', "Most 401k plans (maybe even all 401k plans as a matter of law) allow the option of moving the money in your 401k account from one mutual fund to another (within the group of funds that are in the plan). So, you can exit from one fund and put all your 401k money (not just the new contributions) into another fund in the group if you like. Whether you can find a fund within that group that invests only in the companies that you approve of is another matter. As mhoran_psprep's answer points out, changing investments inside a 401k (ditto IRAs, 403b and 457 plans) is without tax consequence which is not the case when you sell one mutual fund and buy another in a non-retirement account.", "The S&P top 5 - 401(k) usually comply with the DOL's suggestion to offer at least three distinct investment options with substantially different risk/return objectives. Typically a short term bond fund. Short term is a year or less and it will rarely have a negative year. A large cap fund, often the S&P index. A balanced fund, offering a mix. Last, the company's stock. This is a great way to put all your eggs in one basket, and when the company goes under, you have no job and no savings. My concern about your Microsoft remark is that you might not have the choice to manage you funds with such granularity. Will you get out of the S&P fund because you think this one stock or even one sector of the S&P is overvalued? And buy into what? The bond fund? If you have the skill to choose individual stocks, and the 401(k) doesn't offer a brokerage window (to trade on your own) then just invest your money outside the 401(k). But. If they offer a matching deposit, don't ignore that."]

Ask for credit decrease

['"Aside from an annual fee, if any, the card issuer makes money 2 ways, the transaction fee, about 1.5%-2% charged to the merchant, and interest from you if you leave a balance month to month. Obviously, the bank has some cost in processing statements and maintaining your account. If up front you are saying you will not have any chance of providing a certain profit level, they may have no interest in your business. (As you updated.) Other card issuers (almost surely with fees) might. Put the cards on ice. A bag of water in freezer. Don\'t be so hasty that you ding your report this way. By trashing the history as well as utilization, you may impact your score enough to do some harm if you actually need credit in the near future. I know this is a game with the credit agencies, a ""how good a borrower am I"" game, but it can really impact your bottom line if you don\'t play along. In reply to Michael\'s comment 1/5/15, if I have one card and am budgeted for $1000/mo in spending, in order to keep utilization down to less than 20%, I\'d need a line of more than $5000. Even if I ignore utilization, my January spending is $1000, but the bill is cut on the 31st and not due till Feb 25th. So a line of nearly $2000 is required unless you wish to make mid cycle payments on an ongoing basis."', 'I agree with JoeTaxpayer that you will be better off in the end if you can just not use your card you are better off in the long run. That said if you are determined to get a card you can control go to a credit union or local bank. Most of them will give you the credit limit you want. This may provide you with a card that you can make use of but know that you can not go wild. The down side is most of these will not be reward cards but my local credit union gave me a 7% card where my Chase card is at 18%(was 5% before the changes to credit card regulations).', '$500 should not have a massive impact on your credit. Why not at the beginning of each month buy a $500 prepaid Visa instead of using your credit card? That way you set a hard limit, but you still have the option of using credit in an emergency.']

Do Fundamentals Matter Anymore in Stock Markets?

["All you have to do is ask Warren Buffet that question and you'll have your answer! (grin) He is the very definition of someone who relies on the fundamentals as a major part of his investment decisions. Investors who rely on analysis of fundamentals tend to be more long-term strategic planners than most other investors, who seem more focused on momentum-based thinking. There are some industries which have historically low P/E ratios, such as utilities, but I don't think that implies poor growth prospects. How often does a utility go out of business? I think oftentimes if you really look into the numbers, there are companies reporting higher earnings and earnings growth, but is that top-line growth, or is it the result of cost-cutting and other measures which artificially imply a healthy and growing company? A healthy company is one which shows year-over-year organic growth in revenues and earnings from sales, not one which has to continually make new acquisitions or use accounting tricks to dress up the bottom line. Is it possible to do well by investing in companies with solid fundamentals? Absolutely. You may not realize the same rate of short-term returns as others who use momentum-based trading strategies, but over the long haul I'm willing to bet you'll see a better overall average return than they do.", "Are you implying that Amazon is a better investment than GE because Amazon's P/E is 175 while GE's is only 27? Or that GE is a better investment than Apple because Apple's P/E is just 13. There are a lot of other ratios to consider than P/E. I personally view high P/E numbers as a red flag. One way to think of a P/E ratio is the number of years it's expected for the company to earn its market cap. (Share price divided by annual earnings per share) It will take Amazon 175 years to earn $353 billion. If I was going to buy a dry cleaners, I would not pay the owner 175 years of earnings to take control of it, I'd never see my investment back. To your point. There is so much future growth seemingly built in to today's stock market that even when a company posts higher than expected earnings, the company's stock may take a hit because maybe future prospects are a little less bright than everyone thought yesterday. The point of fundamental analysis is that you want to look at a company's management style and financial strategies. How is it paying its debt? How is it accumulating the debt? How is it's return on assets? How is the return on assets trending? This way when you look at a few companies in the same market segment you may have a better shot at picking the winner over time. The company that piles on new debt for every new project is likely to continue that path in to oblivion, regardless of the P/E ratio. (or some other equally less forward thinking management practice that you uncover in your fundamental analysis efforts). And I'll add... No amount of historical good decision making from a company's management can prepare for a total market downturn, or lack of investor confidence in general. The market is the market; sometimes it's up irrationally, sometimes it's down irrationally.", "It sounds to me like you may not be defining fundamental investing very well, which is why it may seem like it doesn't matter. Fundamental investing means valuing a stock based on your estimate of its future profitability (and thus cash flows and dividends). One way to do this is to look at the multiples you have described. But multiples are inherently backward-looking so for firms with good growth prospects, they can be very poor estimates of future profitability. When you see a firm with ratios way out of whack with other firms, you can conclude that the market thinks that firm has a lot of future growth possibilities. That's all. It could be that the market is overestimating that growth, but you would need more information in order to conclude that. We call Warren Buffet a fundamental investor because he tends to think the market has made a mistake and overvalued many firms with crazy ratios. That may be in many cases, but it doesn't necessarily mean those investors are not using fundamental analysis to come up with their valuations. Fundamental investing is still very much relevant and is probably the primary determinant of stock prices. It's just that fundamental investing encompasses estimating things like future growth and innovation, which is a lot more than just looking at the ratios you have described."]

Investing $50k + Real Estate

["I would say that, for the most part, money should not be invested in the stock market or real estate. Mostly this money should be kept in savings: I feel like your emergency fund is light. You do not indicate what your expenses are per month, but unless you can live off of 1K/month, that is pretty low. I would bump that to about 15K, but that really depends upon your expenses. You may want to go higher when you consider your real estate investments. What happens if a water heater needs replacement? (41K left) EDIT: As stated you could reduce your expenses, in an emergency, to 2K. At the bare minimum your emergency fund should be 12K. I'd still be likely to have more as you don't have any money in sinking funds or designated savings and the real estate leaves you a bit exposed. In your shoes, I'd have 12K as a general emergency fund. Another 5K in a car fund (I don't mind driving a 5,000 car), 5k in a real estate/home repair fund, and save about 400 per month for yearly insurance and tax costs. Your first point is incorrect, you do have debt in the form of a car lease. That car needs to be replaced, and you might want to upgrade the other car. How much? Perhaps spend 12K on each and sell the existing car for 2K? (19K left). Congratulations on attempting to bootstrap a software company. What kind of cash do you anticipate needing? How about keeping 10K designated for that? (9K left) Assuming that medical school will run you about 50K per year for 4 years how do you propose to pay for it? Assuming that you put away 4K per month for 24 months and have 9K, you will come up about 95K short assuming some interests in your favor. The time frame is too short to invest it, so you are stuck with crappy bank rates.", '"My spouse will only be entering medical school within 2 years at the earliest, and will likely be there for about 4-5 years. If she get\'s into the school she wants we would not have to move This is probably the biggest return on investment that you can get. Sure, you could invest what you have in the market and take out tens or hundreds of thousands of dollars on ""cheap"" medical school loans, but consider this: Figure out how much you need for all 4-5 years, and develop a plan to make sure you can cash-flow the entire education. Bootstrapping a software company has potential for high rewards, but a much greater risk. you could get 10X back or you could lose it all. With your income, you\'ve got plenty of time to save for college, so I don\'t see that as a huge win now. I would also dump the lease - you can probably get a much better car for $16k that the five-year old one you have when the lease is up. (or get a similar car for less money). With no debt and a good income you do not need a credit score. The lease probably didn\'t help it that much anyways - you\'re paying more for the lease than any benefit you would get by a higher score."', 'I have been on the same boat as you are right now. So basically, it depends on your goals, risk tolerance, upcoming life events! You want a plan not just for this particular 50K, but for your household assets and future earnings to come! My suggestion: Get a flat fee, online financial advisor to do the work for you. You don’t have to figure this out by yourself. Personally, I would invest in a portfolio that: Offers dynamic asset allocation plans that evolves over time based on changing market conditions. Offers a healthy mix of beta and alpha strategies along with the liquidity and ability to monitor activity online. Has structural risk management in place. Risk management is as much about increasing risk as it is about cutting risk. Therefore, you want a plan for de-allocating and re-allocating risk Hope this helps.', 'Get rid of the lease and buy a used car. A good buy is an Audi because they are popular, high-quality cars. A 2007 Audi A4 costs about $7000. You will save a lot of money by dumping the lease and owning. Go for quality. Stay away from fad cars and SUVs which are overpriced for their value. Full sized sedans are the safest cars. The maintenance on a high-quality old car is way cheaper than the costs of a newer car. Sell the overseas property. It is a strong real estate market now, good time to sell. It is never good to have property far away from where you are. You need to have a timeline to plan investments. Are you going to medical school in one year, three years, five years? You need to make a plan. Every investment is a BUY and a SELL and you should plan for both. If your business is software, look for a revenue-generating asset in that area. An example of a revenue-generating asset is a license. For example, some software like ANSYS has license costs in the region of $30,000 annually. If you broker the license, or buy and re-sell the license you can make a good profit. This is just one example. Use your expertise to find the right vehicle. Make sure it is a REVENUE-GENERATING ASSET.']

UK - How to receive payments in euros

['"See my comment below about the official exchange rate. There is no ""official"" exchange rate to apply as far as I\'m aware. However the bank is already applying the same exchange rate you can find in the forex markets. They are simply applying a spread (meaning they will add some amount to the exchange rate whichever way you are exchanging currency). You will almost certainly not find a bank that doesn\'t apply a spread. Of course, their spread might be large, so that\'s why it is good to compare rates. By the way, 5 GBP/month seems reasonable for a foreign currency (or any) acct. The transaction fees might be cheaper in a different ""package"" so check. You should consider trying PayPal. Their spread is quite small - and publicly disclosed - and their per-transaction fees are very low. Of course, this is not a bank account. But you can easily connect it to your bank account and transfer the money between accounts quickly. They also offer free foreign currency accounts that you can basically open and close in a click. Transfers are instantaneous. I am based in Germany but I haven\'t had a problem with clients from various English-speaking countries using PayPal. They actually seem to prefer it in many instances."', '"I am not sure about transferwise and how they work, but generally when I had to transfer money across countries, I ended up using a foreign currency/transfer company who needed the destination account details i.e. a GBP account in the UK in your case, and money from the source account. Basically that means your father would need to open an EUR account, probably in an EU country (is this an option?) but may be in the UK is fine too depending on transfer fees. And a GBP account in the UK, perhaps see if there is a better business account than HSBC around, I have used them as well as Santander before. The only FX transaction done in this straightforward set up is the one performed by the specialised company (there are a few) - and their spread (difference between interbank i.e. ""official"" and your price) is likely to be around 1.0 - 1.5%. The other expenses are transfer fees to the FX company account, say a flat fee of $25 for the SWIFT payment. The full amount less the spread above then goes to your UK GBP account. There are still the running costs of both EUR and GBP accounts of course, but here the advice would be just to shop around for offers/free banking periods etc. Point being, given the saving in FX conversion, it might still be a better overall deal than just letting HSBC deal with it all."']

Online Foreign Exchange Brokerages: Which ones are good & reputable for smaller trades?

['"For ""smaller trades"", I\'m not sure you can beat FXCM.com, a large, dedicated FX trading shop with extremely tight spreads, and a ""Micro"" account that you can open for as little as $25(US). Their ""main"" offering has a minimum account size of $2k (US), but recommends an account size of $10k or more. But they also have a ""micro"" account, which can be opened for as little as $25, with a $500 or higher recommended size. I haven\'t used them personally, but they\'re well known in the discount FX space. One strong positive indicator, in my opinion, is that they sell an online FX training course for $19.99. Why is that positive? It means that their margins on your activity are small, and they\'re not trying to get you ""hooked"". If that were not the case, they\'d give the course away, since they\'d be able to afford to, and they would expect to make so much of your subsequent activity. They do have some free online materials, too, but not the video stuff. Another plus is that they encourage you to use less leverage than they allow. This does potentially serve their interests, by getting more of your deposits with them, but a lot of FX shops advertise the leverage to appeal to users\' hope to make more faster, which isn\'t a great sign, in my opinion. Note that the micro account has no human support; you can only get support via email. On the other hand, the cost to test them out is close to nil; you can literally open an account for $25."', "I used XE trade once several years ago. I found them quite easy to use after the slightly fiddly account setup process (needed for security/anti-money laundering I think). I trusted them because I'd been using their online FX rates for a long time. I can't really comment on the specific questions you ask though as this was a long time ago and I haven't needed one since.", "Like Ganesh, I've used XE Trade - however I still do, fairly often. I have never had a single problem with them regardless of the method I used to move money -- Draft, Wire, ACH, bill payment through online banking, etc. The type of trade I do most often is online bill payment to ACH -- i.e. I pay through my banking site and they pay through ACH. There's no fee and it takes 2 business days to go through. I do mainly CAD to USD conversions and I lose about 1.25 cents on the rate -- for example, if the CAD is worth 95 cents US, converting $100 CAD would get me $92.75 USD. The banks usually take 2.5% or so, so it's 50% savings. It was free and pretty simple to sign up, all online -- and besides the standard info all they required was for me to upload a scan of a bank statement. As for an API, I have no idea if they have one.", 'The following have been recommended to me for the UK: When I was doing my investigations, all had good reputations but Interactive Investor looked to have the nicer service and their fees seemed a bit more reasonable. TD Waterhouse has the advantage of a number of sites serving local markets (TD Ameritrade for the US, for instance).', "I used Oanda.com for Forex trading a couple years ago. I am in the US but I think it's available in the UK as well. At the time, they had no commissions and their spreads were comparable or better than other brokers. The spreads would just quite considerably when a big event like a Fed meeting or the unemployment figures come out, but I suspect that that is the same everywhere (or they have constant spreads and reject trades). They did not push the high leverages like other brokers were at the time. I considered this to be very reputable, because though the profits to be gotten through 100:1 leverage are great advertising, the reality is that one unexpected spike and a newbie would lose a bunch of money in a margin call.", "There are many good brokers available in the market and many spammers too. Personally I have been associated with FXCM since 2001 and have never faced any problem. But everyone has their own personal choice and I recommend you to make your own. But the question is how to find out which broker is a good broker and would provide you with a timely and reliable service? Online google check? Not really. There is so much competition between brokerage firms that they keep writing rubbish about each other on blogs and websites. Best thing is to is check with regulator's website. For US: NFA is a regulator for all forex firms. Information about any regulated forex firm could be found here. http://www.nfa.futures.org/basicnet/welcome.aspx For UK: Its FSA. Information on all regulated Uk based firm could be found here. http://www.fsa.gov.uk/register/firmSearchForm.do Remember in many countries its not compulsory for a forex firm to be regulated but being regulated ensure that the govt. has a watch on the operations of the firm. Also most of the firms out there provide accounts for large as well as small traders so there is nothing much to look for even if you are a small trader. Do keep in mind that if you are a US Citizen you are restricted by the US Govt. to trade only with a broker within US. You are not allowed to trade with any brokerage firm that is based outside the country. Forex Trading involves a significant amount of risk make sure you study the markets well and get yourself educated properly before risking your money. While I have made a lot of money trading forex I have seen a lot of people loosing everything. Please understand the risk and please make sure you only trade with the money which you can afford to loose."]

In what category would I put a loan I took to pay an expense

['A loan is most generally a liability, a part of the balance sheet. Expenses & income are part of the income statement. Income is the net of revenues after expenses. The interest is an expense on the income statement, but the loan itself does not reside there unless if it is defaulted and forgiven. Then it would become a revenue or contra-expense, depending on the methodology. The original purpose of the income statement is to show the net inflows of short term operational accruals which would exclude new borrowing and repaid loans. The cash flow statement will better show each cash event such as borrowing debt, repaying debt, or paying off a bill. To show how a loan may have funded a bill, which in theory it directly did not because an entity, be it a person or business, is like a single tank of water with multiple pipes filling and multiple pipes extracting, so it is impossible to know which exact inflow funded which exact outflow unless if there is only one inflow per period and one outflow per the same period. That being said, with a cash flow statement, the new loan will show a cash inflow when booked under the financing portion, and paying a bill will show a cash outflow when booked under the operating portion. With only those two transactions booked and an empty balance sheet beforehand, it could be determined that a new loan funded a bill payment.']

In debts now, help please

['']

Real estate loans for repairs

["If you intend to flip this property, you might consider either a construction loan or private money. A construction loan allows you to borrow from a bank against the value of the finished house a little at a time. As each stage of the construction/repairs are completed, the bank releases more funds to you. Interest accrues during the construction, but no payments need to be made until the construction/repairs are complete. Private money works in a similar manner, but the full amount can be released to you at once so you can get the repairs done more quickly. The interest rate will be higher. If you are flipping, then this higher interest rate is simply a cost of doing business. Since it's a private loan, you ca structure the deal any way you want. Perhaps accruing interest until the property is sold and then paying it back as a single balloon payment on sale of the property. To find private money, contact a mortgage broker and tell them what you have in mind. If you're intending to keep the property for yourself, private money is still an option. Once the repairs are complete, have the bank reassess the property value and refinance based on the new amount. Pay back the private loan with equity pulled from the house and all the shiny new repairs."]

How do I figure out if I will owe taxes

["Do I get a write off for paying student loans? Maybe. See https://www.irs.gov/publications/p970/ch04.html Generally, personal interest you pay, other than certain mortgage interest, isn't deductible on your tax return. However, if your modified adjusted gross income (MAGI) is less than $80,000 ($160,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. This deduction can reduce the amount of your income subject to tax by up to $2,500. Read the whole document to be sure, but that's the basics. You'll have to fill out a 1040 or 1040A to claim a student loan deduction. It won't be on the 1040EZ. You do not have to itemize though. What kinds of write-offs and credits are available for someone who is single and lives in an apartment with two roommates? As a practical matter, in 2016 you'll get the standard deduction for someone who is single ($6300) and the personal exemption ($4050). It's extremely unlikely that you'll be able to deduct more by itemizing. Most people who itemize are taking a mortgage interest deduction. Major medical bills are another possibility, but they have to be more than 10% of your adjusted gross income (it's one of the lines on your tax return). Assuming you rent and are reasonably healthy, you are unlikely to have enough to itemize. The most likely additional deduction would be the one for an IRA (Individual Retirement Account). Although you might be better off doing a Roth anyway (no tax deduction). If you are self-employed or making more than $100,000 a year, there are additional issues. But most people aren't. If you filled out a W-4 and will get a W-2 back, you aren't self-employed. Hopefully you have a rough idea of your annual income. The first $9275 over your deductions will pay 10%. After that, up to $37,650 you pay 15%. The 2016 link above has a link (PDF) to the full table if you need more than that. Note that that is the first $48,000 in income with your $10,350 in deductions.", "If you want to predict the, the easiest solution is to get hold of a copy of last year's tax forms and fill them in with estimated numbers. Odds are that none of the more complicated deductions will apply to you this first time around, so I'd suggest just using the federal 1040EZ, and your state's equivalent, for this purpose. If it turns out that you can claim anything more than the standard deduction, that would reduce your taxes, so this is leaning toward the safe side.", "Your employer pays the expected (but estimated) taxes for you. So the chances are you don't own more; but that might be different if you have other sources of income that he doesn't know about (interest on savings or a side-job or whatever). Also, you could have deductions that reduce the taxes you owe, which he again doesn't know, so you overpay. If you don't file, you don't get them back. Most tax software companies offer free usage of their tool for standard filings, and you can use it to find out your tax situation, and then buy the tool only when you want to file. If you use one of those, you can type in all your data, and depending on the result, decide to buy it and file right away. Note that if it turns out you owe taxes, you must file (and pay), but of course you can do it manually instead of buying the tool. If it turns out you get money back, it is your decision to file - you probably don't care for a small amount, but if you get 1000 $ back, you might want to file - again, buying the software of doing it manually.", '"The short answer is - ""Your employer should typically deduct enough every paycheck so you don\'t owe anything on April 15th, and no more."" The long answer is ""Your employer may make an error in how much to deduct, particularly if you have more than 1 job, or have any special deductions/income. Calculate your estimated total taxes for the year by estimating all your income and deductions on a paper copy of a tax return [I say paper copy so that you become familiar with what the income and deductions actually are, whereas plugging into an online spreadsheet makes you blind to what\'s actually going on]. Compare that with what your employer deducts every paycheck, * the number of paychecks in the year. This tells you how much extra you will pay / be refunded on April 15th, as accurately as you can estimate your income and deductions."""', "Do you have a regular job, where you work for somebody else and they pay you a salary? If so, they should be deducting estimated taxes from your paychecks and sending them in to the government. How much they deduct depends on your salary and what you put down on your W-4. Assuming you filled that out accurately, they will withhold an amount that should closely match the taxes you would owe if you took the standard deduction, have no income besides this job, and no unusual deductions. If that's the case, come next April 15 you will probably get a small refund. If you own a small business or are an independent contractor, then you have to estimate the taxes you will owe and make quarterly payments. If you're worried that the amount they're withholding doesn't sound right, then as GradeEhBacon says, get a copy of last year's tax forms (or this year's if they're out by now) -- paper or electronic -- fill them out by estimating what your total income will be for the year, etc, and see what the tax comes out to be."]

What are some factors I should consider when choosing between a CPA and tax software

["Largely it comes down to the complexity of your return (likely relatively simple if it's your first time filing) and your comfort level with using software. More complex returns would include filing business claims, handling stocks and investments, special return forms, etc. One benefit to most of the software options out there such as TurboTax, HR Block, and Tax Slayer, are that they are free to use and you only pay when you're ready to file. You could give them a shot to see how easy/difficult they are and if you feel overwhelmed, then contact a CPA (whose time won't be free). Also remember that those HR Block seasonal places that open up are not CPA's, but are temps hired and trained to use the software that you would find online. You didn't indicate they were an option, but I like to point that out to those who might not know otherwise. My opinion would be to use one of the online options because of cost and their ease of use. They also allow you to take your time and save your progress, so you can start using it and go ask questions/do research on your own time.", "Hiring a CPA comes into play if you're doing something that requires judgement or planning, such as valuation of internal shares in a partnership, valuation of assets in an asset swap, or distribution of the proceeds of a liquidation. That said, I would strongly suggest hiring someone who is also a Tax Attorney over a plain old CPA. In the event you do need representation to clarify positions or assertions, you're probably going to need to hire one anyway. Qualified representation is much cheaper to hire up front than after the fact. If all you need is help filing compliance paperwork (returns), software should be more than adequate.", "I'm glad keshlam and Bobby mentioned there are free tools, both from the IRS and private software companies. Also search for Volunteer Income Tax Assistance (VITA) in your area for individual help with your return. A walk-in tax clinic strength is tax preparation. CPAs and EAs provide a higher level of service. For example, they compile and review your prior year's return and your current year, although that is not relevant to your current situation. EAs and CPAs are allowed to represent you before the IRS. They can directly meet or contact the IRS and navigate audits and other requests on your behalf. Outside of tax season, an accountant can help you with tax planning and other taxable events. Some people do not hire a CPA or EA until they need representation. Establishing a relationship and familiarity with an accountant now can save time and money if you do anticipate you will need representation later. Part of what makes the tax code complicated is it can use very specific definitions of a common word. Furthermore, the specific definition of a phrase or word can change between publications. Also, the tax code uses all-encompassing definitions and provide detailed and lengthy lists that are not exhaustive; you may not find your situation listed or described in the tax code, yet you are responsible for reporting your taxable events. The best software cannot navigate you through your tax situation like an accountant. Lastly, some of the smartest people I have met are accountants and to get the most out of meeting with them you should be as familiar as possible with your position. The more familiar you are with accounting, the more advanced knowledge they can share with you. In short, you will probably need an accountant when: You need to explain yourself before the IRS (representation), you are encountering varying definitions in the tax code that have an impact on your return, or you have important economic activities that you are unsure of appropriate tax treatment."]

How to process IRS check as a non-resident?

["I suspect @SpehroPefhany is correct and that your bank will cash a check from the US Department of the Treasury. Especially since they're the same ones who guarantee the U.S. Dollar. They may hold the funds until the check clears, but I think you'll have good luck going through your bank. Of course, fees and exchange rate are a factor. Consider browsing the IRS and US Treasury Department websites for suggestions/FAQs. I suggest you line up a way to cash it, and make sure there's enough left after fees and exchange rate and postage to get the check that the whole process is worth it, all before you ask it to be shipped to you. If there's no way to do it through your bank, through a money exchange business (those at the airport come to mind) or through your government (postal bank?), and the check is enough that you're willing to go through some trouble, then you should look into assigning power of attorney for this purpose. I don't know if it is possible, but it might be worth looking into. Look for US based banks in your area."]

Payroll reimbursments

["Not correct. First - when you say they don't tax the reimbursement, they are classifying it in a way that makes it taxable to you (just not withholding tax at that time). In effect, they are under-withholding, if these reimbursement are high enough, you'll have not just a tax bill, but penalties for not paying enough all year. My reimbursements do not produce any kind of pay stub, they are a direct deposit, and are not added to my income, not as they occur, nor at year end on W2. Have you asked them why they handle it this way? It's wrong, and it's costing you.", '"What they are doing is wrong. The IRS and the state might not be happy with what they are doing. One thing you can ask for them to do is to give you a credit card for business and travel expenses. You will still have to submit receipts for expenses, but it will also make it clear to the IRS that these checks are not income. Keep the pay stubs for the year, or the pdf files if they don\'t give you a physical stub. Pay attention to the YTD numbers on each stub to make sure they aren\'t sneaking in the expenses as income. If they continue to do this, ask about ownership of the items purchased, since you will be paying the tax shouldn\'t you own it? You can in the future tell them ""I was going to buy X like the customer wanted, but I just bought a new washer at home and their wasn\'t enough room on the credit card. Maybe next month"""', "As @Dilip suggested in the comments, the problem is the accountability of the reimbursement plans. In order for the reimbursement to be non-taxable, there has to be a reimbursement plan and policy set up by the employer, it has to be done per receipt, and accounted for correctly. If the employer just cuts you a check - the conditions may not be met, and as such - the reimbursement becomes taxable. In your case, it seems like the employer has not set up a proper (accountable) reimbursement plan, thus your reimbursements are taxable. @Joe pointed out that since the employer also doesn't withhold taxes (as he should), you may have an unexpected tax bill on April 15. This Chron article describes the distinction between the accountable and non-accountable plans. Only with the accountable plans the reimbursements are non-taxable.", "After reading OP Mark's question and the various answers carefully and also looking over some old pay stubs of mine, I am beginning to wonder if he is mis-reading his pay stub or slip of paper attached to the reimbursement check for the item(s) he purchases. Pay stubs (whether paper documents attached to checks or things received in one's company mailbox or available for downloading from a company web site while the money is deposited electronically into the employee's checking account) vary from company to company, but a reasonably well-designed stub would likely have categories such as Taxable gross income for the pay period: This is the amount from which payroll taxes (Federal and State income tax, Social Security and Medicare tax) are deducted as well as other post-tax deductions such as money going to purchase of US Savings Bonds, contributions to United Way via payroll deduction, contribution to Roth 401k etc. Employer-paid group life insurance premiums are taxable income too for any portion of the policy that exceeds $50K. In some cases, these appear as a lump sum on the last pay stub for the year. Nontaxable gross income for the pay period: This would be sum total of the amounts contributed to nonRoth 401k plans, employee's share of group health-care insurance premiums for employee and/or employee's family, money deposited into FSA accounts, etc. Net pay: This is the amount of the attached check or money sent via ACH to the employee's bank account. Year-to-date amounts: These just tell the employee what has been earned/paid/withheld to date in the various categories. Now, OP Mark said My company does not tax the reimbursement but they do add it to my running gross earnings total for the year. So, the question is whether the amount of the reimbursement is included in the Year-to-date amount of Taxable Income. If YTD Taxable Income does not include the reimbursement amount, then the the OP's question and the answers and comments are moot; unless the company has really-messed-up (Pat. Pending) payroll software that does weird things, the amount on the W2 form will be whatever is shown as YTD Taxable Income on the last pay stub of the year, and, as @DJClayworth noted cogently, it is what will appear on the W2 form that really matters. In summary, it is good that OP Mark is taking the time to investigate the matter of the reimbursements appearing in Total Gross Income, but if the amounts are not appearing in the YTD Taxable Income, his Payroll Office may just reassure him that they have good software and that what the YTD Taxable Income says on the last pay stub is what will be appearing on his W2 form. I am fairly confident that this is what will be the resolution of the matter because if the amount of the reimbursement was included in Taxable Income during that pay period and no tax was withheld, then the employer has a problem with Social Security and Medicare tax underwithholding, and nonpayment of this tax plus the employer's share to the US Treasury in timely fashion. The IRS takes an extremely dim view of such shenanigans and most employers are unlikely to take the risk."]

Are Credit Cards a service to banks?

['"As i see it, with a debit card, they are taken kinda out of the game. They are not lending money, it seems really bad for them. Not exactly. It is true that they\'re not lending money, but they charge a hefty commission from the retailers for each swipe which is pure profit with almost no risk. One of the proposals considered (or maybe approved already, don\'t know) in Congress is to cap that hefty commission, which will really make the debit cards merely a service for the checking account holder, rather than a profit maker for the bank. On the other hand, it\'s definitely good for individuals. I disagree with that. Debit cards are easier to use than checks, but they provide much less protection than credit cards. Here\'s what I had to say on this a while ago, and seems like the community agrees. But, why do we really need a credit history to buy some of the more expensive stuff Because the system is broken. It rewards people in debt by giving them more opportunities to get into even more debts, while people who owe nothing to noone cannot get a credit when they do need one. With the current system the potential creditor can only asses the risk of someone who has debt already, they have no way of assessing risks of someone with no debts. To me, all this credit card system seems like an awfully nice way to make loads of money, backed by governments as well. Well, credit cards have nothing to do with it. It\'s the credit scores system that is broken. If we replace the ""card"" with ""score"" in your question - then yes, you\'re thinking correctly. That of course is true for the US, in other countries I have no knowledge on how the creditors assess the risks."', "Credit cards are a golden goose for banks, as they get to issue high-interest loans and simultaneously generate alot of fee income. Debit cards aren't quite as good, but they still generate substantial fee income -- ~2% of every credit/non-PIN debit transaction goes to the bank and credit card network. Credit histories exist because they are the most effective tool available to predict whether you will pay back your loans or not. You don't need a credit history to buy most things, you need a credit history to get a large loan. Think of it from perspective of a lender: Credit scoring is the bank's way screening out people who are expensive to do business with. It's objective, doesn't discriminate on the basis of race, sex or other factors, and you have recourse if the rating agencies have incorrect information."]

For net worth, should I value physical property at my cost to replace it, or the amount I could get for selling it?

["You are not asking for insurance purposes. So I'll go with this - I have two asset numbers I track. All investments, retirement accounts, etc, the kind that are valued at day's end by the market, etc. From that number I subtract the mortgage. This produces the number that I can say is my net worth with a paid in full house. The second number simply adds back the house's value, give or take. Unless I owned art that was valued in the six figures, it seems pointless to me to add it up, except for insurance. If my wife and I died tomorrow, the kid can certainly auction our stuff off, but knowing that number holds no interest for us. When most people talk 'net worth', I don't see them adding these things up. Cars, maybe, but not even that.", '"You\'re asking for opinions here, because it\'s a matter of how you look at it. I\'ll give it a shot anyway. For insurance purposes - there\'s a clear answer: you insure based on how much it would cost you to replace it. For some reason, you\'re considering as a possibility negotiating with the insurance company about that, but I\'ve never heard of insuring something at a ""possible sales value"" unless you\'re talking about a one of a kind thing, or a particularly valuable artifact: art, jewelry, etc. That it would be appraised and insured based on the appraised value. Besides, most of the stuff usually loses value once you bought it, not gains, so insuring per replacement costs makes more sense because it costs more. As to your estimations of your own net worth to yourself - its up to you. I would say that something only worth what people would pay for it. So if you have a car that you just bought brand new, replacing it would cost you $X, but you can only sell it for $X-10%, because it depreciated by at least 10% once you\'ve driven it off the dealer\'s lot. So I would estimate your worth as $X-10% based on the car, not $X, because although you spent $X on it - you can never recover it if you sell it, so you can\'t claim to have it as your ""net worth""."', '"My opinion: including the value of depreciating property one owns in a net worth calculation is silly - but could be interesting You don\'t expect your TV or laptop to gain value. Instead, you expect them to decrease in value every year until you replace them. Anything you expect to hold or increase in value (art, a house, etc) is a different story. If you\'d like to really get anal about this, you can track your net worth like a business would track its balance sheet. I\'m not going to go into detail, but the general idea is that when you purchase an item, you debit the cost from ""cash"" and add the value paid to ""assets"" (so your net worth doesn\'t change when you make a purchase). You then depreciate the value of the item under ""assets"" according to a depreciation schedule. If you plan on replacing your laptop every three years, you might subtract 33% of the value every year. This could be an interesting exercise (i.e. even if you make money, your net worth may decrease because of all the depreciating junk you own), but my hunch is that it wouldn\'t be worth the effort it requires."', '"There is no objective ""should"". You need to be clear why you\'re tracking these numbers, and the right answer will come out of that. I think the main reason an individual would add up their assets and net worth is to get a sense of whether they are ""making progress"" or whether they are saving enough money, or perhaps whether they are getting close to the net worth at which they can make some life change. Obviously shares or other investment property ought to be counted in that. Buying small-medium consumer goods like furniture or electronics may improve your life but it\'s not especially improving your financial position. Accounting for them with little $20 or $200 changes every month or year is not necessarily useful. Things like cars are an intermediate case because firstly they\'re fairly large chunks of money and secondly they commonly are things people sell on for nontrivial amounts of money and you can reasonably estimate the value. If for instance I take $30k out of my bank account and buy a new car, how has my net worth changed? It would be too pessimistic to say I\'m $30k worse off. If I really needed the money back, I could go and sell the car, but not for $30k. So, a good way to represent this is an immediate 10-20% cost for off-the-lot depreciation of the car, and then another 12% every year (or 1% every month). If you\'re tracking lifestyle assets that you want to accumulate, I think monetary worth is not the best scale, because it\'s only weakly correlated with the value you get out of them. Case in point: you probably wouldn\'t buy a second-hand mattress, and they have pretty limited resale value. Financially, the value of the mattress collapses as soon as you get it home, but the lifestyle benefit of it holds up just fine for eight years or so. So if there are some major purchases (say >$1000) that you want to make, and you want to track it, what I would do is: make a list of things you want to buy in the future, and then tick them off when you either do buy them, or cross them out when you decide you actually don\'t want them. Then you have something to motivate saving, and you have a chance to think it over before you make the purchase. You can also look back on what seemed to be important to you in the past and either feel satisfied you achieved what you wanted, or you can discover more about yourself by seeing how your desires change. You probably don\'t want to so much spend $50k as you want to buy a TV, a dishwasher, a trip to whereever..."', '"Valuation by definition is what an item is worth, not what you paid for it. Net worth should be market value for fixed assets or ""capital"" goods. I would consider this cars, real property, furniture, jewelry, appliances, tools, etc. Everything else can be valued by liquidation value. You can use valuation guides for tax deductions as a way to guide your valuation. Insurance companies usually just pick a percentage of your home\'s value as a guesstimate for content value. I could see doing this as a way to guide purchase decisions for appliances, cars or the like. But if you are trying to figure out the market value of your socks and underwear, I would argue that you\'re doing something that\'s a little silly."']

Why are people from UAE and Dubai so rich?

["They aren't all rich on average. And oil and gas is actually now only about 25% of the economy in the UAE (incredibly!). There are good reasons why it felt that way, though: The UAE and a number of other oil-rich nations all realize that they need to diversify away from oil revenues. International investment and tourism are the main ways in which they hope to attract capital (free trade/full foreign ownership/no-tax zones, World Cup, etc.). Business and government are often one and the same or working closely together, and they are extremely savvy about cultivating your experience in their company, and want to make sure they are doing everything in their power to get you to like and spend money in their country. Essentially, you are visiting their version of Las Vegas. Additionally, they have taken on massive debt to create those kinds of cities and experiences. According to the World Bank and the CIA (see here), the per capita GDP of the UAE on a Purchasing Price Parity basis is about 18% higher than in the US. Since much of the oil wealth is controlled by the state, it is not certain how evenly that income is distributed (World Bank and CIA statistics do not provide R/P or Gini data for UAE, while it is provided for most nations)."]

When should I open a “Line of credit” at my bank?

["With the information you have given, I would say never. Remember the banker is a salesman, and the line of credit is the product. If you don't need to borrow the money for something specific, then you don't need the line of credit in the first place. Even if you did need something I would tell you to save up and pay cash for it. On the tax advantage: There is none, in the US you can deduct your mortgage interest on your taxes but it's not a tax credit it's a tax deductions. Let me explain further: You spend $10,000 on mortgage interest, and you're in the 25% tax bracket. You send the bank $10,000 in return you get at tax savings of $2500. You are still in the hole $7500 You would have been better off not taking out the loan in the first place. On the Emergency Fund: You should have 3 - 6 months of expenses in cash, like a money market account. This money isn't for investing, it's like insurance, and you don't make money on insurance. The last thing you want to do is have to go into debt right in the middle of an emergency. Say you lost your job, the last thing you would want to do is borrow money, right at the time you have no income to pay it back. The bank is under no obligation to maintain you credit limit and can without notice reduce it, they can in most cases call the loan balance due in full with little or no notice as well. Both of those are likely scenarios if the bank were to become aware of the fact that you were unemployed.", "There are two basic types of lines of credit typically offered at a retail bank: Overdraft line of credit is essentially a revolving personal loan that you can draw upon as needed or automatically draw on when you overdraw on your checking account. Typically with a commercial bank there is a fee to use the automatic overdraft in addition to interest. Some credit unions don't charge a fee. Interest is typically computed using average daily balance. A Home equity line of credit is a revolving loan that is secured against your home. Interest on home-improvement related expenses is deductible. Since the bank gets a lien on your home, the rates are low. Sometimes you can even get debit cards that will hit the line. I think these are a good idea if:", 'A line of credit is a poor substitute for an emergency fund. Banks typically have a clause that allows them to stop further withdrawals from your line of credit if there is a change of vaguely defined type. For example, if you lose your job they can stop you from making withdrawals from your line-of-credit.', '"The only really good reason to open a line of credit is that you want to buy something that you don\'t have money for. That\'s got its own risks - see plenty of other places to see warnings about not borrowing too much. The only other reason is that you might want to use a line of credit as your emergency fund. The usual way of doing this is to keep the money in an easily acccessible savings account - but such accounts usually pay rather now interest, and there is an argument for instead investing your emergency money in a higher-interest but less-accessible fund and using a line of credit to tide you over until you can extract the money. I\'m worried about the comment that you can ""deduct my interest on my tax returns"". That is usually only possible if you are borrowing money to invest. It sounds as if your banker is going to persuade you to not only open a line of credit, but then invest that money in something. Be aware that this kind of \'leveraging\' is much higher risk than investing money you already own."', "I have a line of credit that I have attached to my checking account in case of an overdraft. Since I haven't over drafted my checking account in 4 years, I typically borrow the minimum $5 from the line of credit and then pay it back the next day. This usually costs me a couple of cents and I have to do it twice a year, but it keeps the account active and they don't close it down."]

Company wants to sell all of its assets, worth more than share price?

["Why is the stock trading at only $5 per share? The share price is the perceived value of the company by people buying and selling the stock. Not the actual value of the company and all its assets. Generally if the company is not doing well, there is a perceived risk that it will burn out the money fast. There is a difference between its signed conditional sale and will get money and has got money. So in short, it's trading at $5 a share because the market doesn't feel like it's worth $12 per share. Quite a few believe there could be issues faced; i.e. it may not make the $12, or there will be additional obligations, i.e. employees may demand more layoff compensation, etc. or the distribution may take few years due to regulatory and legal hurdles. The only problem is the stock exchange states if the company has no core business, the stock will be suspended soon (hopefully they can release the $12 per share first). What will happen if I hold shares in the company, the stock gets suspended, and its sitting on $12 per share? Can it still distribute it out? Every country and stock markets have laid out procedures for de-listing a company and closing a company. The company can give $10 as say dividends and remaining later; or as part of the closure process, the company will distribute the balance among shareholders. This would be a long drawn process.", 'The stock exchange here serves as a meeting place for current shareholders who want to sell their shares to someone else. This has nothing to do with liquidation, which is a transaction between the company and its shareholders. A company does not have to be listed on an exchange to make distributions to shareholders.']

Why do I not see goods and services all change their price when inflation is high?

['In most circumstances prices do not change on a daily basis on most goods and services, and just because inflation is high does not mean all prices of every good and service has to increase over the short term. Prices are determined by costs of doing business, manufacturing costs and wage growth, and by competition. For example, if one product has very little competition and costs to produce it have gone up, then the seller might increase prices by 10% to cover their cost of buying the goods off the manufacturer, whilst another product may have plenty of competition, the seller has sourced a new manufacturer from overseas with lower manufacturing costs, they might lower their selling costs by 5% to better compete and increase their sales. Inflation figures are calculated from a set basket of goods and services, and if inflation increases it does not mean that all prices in that basket have gone up, only that the aggregate for the whole basket of goods and services has gone up since the last inflation figures were calculated.', "How high is high? In countries that suffered hyperinflation such as the Weimar Republic around 1923 and Zimbabwe around the late 1990s this certainly did happen on a daily basis. E.g. One boy, who was sent to buy two bread buns, stopped to play football and by the time he got to the shop, the price had gone up, so he could only afford to buy one. or One father set out for Berlin to buy a pair of shoes. When he got there, he could only afford a cup of coffee and the bus fare home. or At the height of the country's economic crisis that year, prices were rising at least twice day, with Zimbabweans forced to carry cash around in plastic bags just to buy basic items.", "It can take a while for inflation to seep into all aspects an economy and be felt by a consumer. Often, things that consumers use the most (like gasoline, wheat products, corn products, soy products, and sugar), are commodities spread across global markets with their own pricing which may be impacted by inflation in any given country. Also, inflation can be beneficial in some ways. A $500/month mortgage payment was a big deal 30 years ago, and now would be considered trivial. That's entirely because of inflation. Run-away inflation, where people are burning the currency to stay warm, is a different beast altogether. Be wary of people who conflate inflation, consumer pricing, and destructive currency devaluation, because they're not the same things."]

Hiring freelancers and taxes

["I am not a lawyer or a tax accountant, but from the description provided it sounds to me like you have created two partnerships: one in which you share 50% of Bob's revenue, and another in which you share 50% of the revenue from the first partnership. If this is the case, then each partnership would need to file form K-1 and issue a copy to the partners of that partnership. I think, but I'm not sure, that each partnership would need an Employer Identification Number (EIN; you can apply for and receive these online with the IRS). You would only pay tax on the portion of profits that are assigned to you on the K-1. (If you've accidentally created a partnership without thinking through all the ramifications, you probably want to straighten this out. You can be held liable for the actions of your partners.) On the other hand, if your contract with Bob explicitly makes you a contractor and not a partner, then Bob should probably be issuing a 1099 to you. Similarly for you and Joe -- if your contract with Joe makes him a subcontractor, then you may need to get an EIN and issue him a 1099 at the end of the year. The money you pay to Joe is a business expense, and would be deducted from the profits you show on your Schedule C. In my opinion, it would be worth the $200 fee paid to a good CPA to make sure you get this right.", "You need to clarify with Bob what your agreement is. If you and Bob are working together on these jobs as partners, you should get a written partnership agreement done by a lawyer who works with software industry entity formation. You can legally be considered a partnership if you are operating a business together, even if there is nothing in writing. The partnership will have its own tax return, and you each will be allocated 50% of the profits/losses (if that's what you agree to). This amount will be reported on your own individual 1040 as self-employment income. Since you have now lost all the expense deductions you would have taken on your Schedule C, and any home office deduction, it's a good idea to put language in the partnership agreement stating that the partnership will reimburse partners for their out-of-pocket expenses. If Bob is just hiring you as a contractor, you give him your SSN, and he issues you a 1099, like any other client. This should be a situation where you invoice him for the amount you are charging. Same thing with Joe - figure out if you're hiring him as an independent contractor, or if you have a partnership. Either way, you will owe income and self-employment tax on your profits. In the case of a partnership, the amount will be on the K-1 from the partnership return. For an independent contractor who's operating as a sole proprietor, you report the income you invoiced for and received, and deduct your expenses, including independent contractors that you hired, on your Schedule C. Talk to your tax guy about quarterly estimated payments. If you don't have a tax guy, go get one. Find somebody people in your city working in your industry recommend. A good tax person will save you more money than they cost. IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law."]

Should the price of fuel in Australia at this point be so high?

["First price isn't artificially maintained at a level. When a refining company signs a contract to buy crude from a supplier, it promises to buy at a certain price with options for increase and decrease due to the fluctuating prices in the market. And it buys crude to build up a certain buffer to supply itself for a certain duration, in case of supply problems. As it had bought oil at a higher price, it would be reluctant to lower the prices even if the current crude it buys is at a lower cost. If it buys oil from the open market, it has no other option than to pass on the hike on to the consumers, so a more intense fluctuation in the prices of oil at the point, where you buy it. Some airlines used hedging to take care of the spurts in the price of oil, to mantian their operating margins. And moreover refining and distribution is a very low margin business, so the company has an incentive to sell at a higher cost if required.", 'Fuel prices are regulated in most countires. The way its regulated differs. Essentially the idea is once the retail prices are up, they are normally kept that level so that a buffer profit is built, now if the fuel prices increase beyond the retail price can still be kept same using the buffer built up.', "(disclaimer: I don't answer specifically about Australia) As long as people don't question car usage and urban sprawl, and thus are willing to pay a premium for being stuck in traffic jams every working day, I don't see any reason why fuel producers wouldn't increase their prices. Given increasing demand from China and other rapidly growing countries, given state of remaining world resources, I think that fuel is a bargain nowadays."]

Are my purchases of stock, mutual funds, ETF's, and commodities investing, or speculation?

['This depends on what your definition of the word is is. Strictly speaking, you are only investing in a company when you buy stock from them somehow. This is usually done during an IPO or a secondary offering. Or, if you are someone like Warren Buffet or an institutional investor, you strike a deal with the company to buy shares directly from them. Otherwise, your money goes to someone else. Merriam-Webster defines speculate as 1b: to review something idly or casually and often inconclusively However, it also defines it as: 2: to assume a business risk in hope of gain; especially : to buy or sell in expectation of profiting from market fluctuations The typical use of the term stock speculation vs stock investing involves definition 1b. This alludes to the idea that little to no research was done about the stock. This may be due to a lack of time, interest, knowledge, etc., or it may be due to a lack of information. The former usually has a negative connotation. The latter may have a negative connotation, though usually the connotation is one of greater risk. Strictly speaking, definition 2 includes investing as you define it along with investing in securities/commodities.', '"Every investment comes with a risk. There is also a bit of speculation involved. In there is an anticipation that one expects the value to go up in normal course of events. By your definition ""If I buy this equipment, I could produce more widgets, or sell more widgets,"" as an investment. Here again there is an anticipation that the widgets you sell will give you more return. If you are investing in stock/share, you are essentially holding a small portion of value in company and to that extent you are owining some equipment that is producing some widget .... Hence when you are purchasing Stocks, it would be looked as investment if you have done your home work and have a good plan of how you want to invest along with weiging the risk involved. However if you are investing only for the purpose of making quick bucks following so called hot tips, then you are not investing but speculating."', '"I\'d argue the two words ought to (in that I see this as a helpful distinction) describe different activities: ""Investing"": spending one\'s money in order to own something of value. This could be equipment (widgets, as you wrote), shares in a company, antiques, land, etc. It is fundamentally an act of buying. ""Speculating"": a mental process in which one attempts to ascertain the future value of some good. Speculation is fundamentally an act of attempted predicting. Under this set of definitions, one can invest without speculating (CDs...no need for prediction) and speculate without investing (virtual investing). In reality, though, the two often go together. The sorts of investments you describe are speculative, that is, they are done with some prediction in mind of future value. The degree of ""speculativeness"", then, has to be related to the nature of the attempted predictions. I\'ve often seen that people say that the ""most speculative"" investments (in my use above, those in which the attempted prediction is most chaotic) have these sorts of properties: And there are probably other ideas that can be included. Corrections/clarifications welcome! P.S. It occurs to me that, actually, maybe High Frequency Trading isn\'t speculative at all, in that those with the fastest computers and closest to Wall Street can actually guarantee many small returns per hour due to the nature of how it works. I don\'t know enough about the mechanics of it to be sure, though."']

Why do grocery stores in the U.S. offer cash back so eagerly?

["The only card I've seen offer this on credit card purchases is Discover. I think they have a special deal with the stores so that the cash-over amount is not included in the percentage-fee the merchant pays. (The cash part shows up broken-out from the purchase amount on the statement--if this was purely something the store did on its own without some collaboration with Discover that would not happen). The first few times I've seen the offer, I assumed it would be treated like a cash-advance (high APR, immediate interest with no grace period, etc.), but it is not. It is treated like a purchase. You have no interest charge if you pay in full during the grace period, and no transaction fee. Now I very rarely go to the ATM. What is in it for Discover? They have a higher balance to charge you interest on if you ever fail to pay in full before the grace period. And Discover doesn't have any debit/pin option that I know of, so no concern of cannibalizing their other business. And happier customers. What is in it for the grocer? Happier customers, and they need to have the armored car come around less often and spend less time counting drawers internally.", "Cash-back also lets the store turn hard currency into an electronic transfer or check, which reduces the hassle/risk of hauling bagfulls of cash to the bank. (The smaller stores I've spoken to have called this out as a major advantage of plastic over either cash or checks. I'm assuming that the problem scales with number and size of transactions.)", "It doesn't cost them anything, they don't pay commission on you taking cash-back. But it brings customers to the stores because these customers would rather buy something and use cash-back to get cash, than go to an ATM and pay the ATM commission.", 'The cost to the store is small. They may have to pay a slightly greater fee because the transaction is now bigger. They do need additional cash on hand. Even though the majority of transactions are electronic (credit/debit) or check, the local grocery store still seems to have significant cash on hand. This is seen as a customer service. If there is a 2% fee the $50 advance costs them $1 for the minority of customers that take advantage of it. After more than 10 years of doing this they have figured this into the cost of groceries. Of course the credit card company could also waive the fee to store. My credit card online statement does tell me how much cash back was received. The line says date, store, amount ($40.00 cash over and $123.45 purchases) $163.45 total. Therefore the credit card company knows that cash back was used.', 'Cash back from credit cards is handled separately than the rest of the purchase, i.e. interest begins accumulating on that day, and likely at a higher rate, and usually comes out of a lower limit than the credit allotted to that card. Given all these differences, and the obvious revenue-generation situation for the lender, it makes sense for them to give the store an incentive, rather than penalize them further, for the use of such a feature. Note: I am not privy to the inner-workings or agreements between large stores and credit lenders, so I cannot guarantee any of this.', "The reason is, stores want customers to use cash. By giving us cash, we are more likely to use cash next time. I feel a little guilty when using my bank card at the store because I know I'm giving about 2-3% of the sale to the bank. Unless I don't really like where I'm shopping (ie Walmart), I try to use cash if I have it. I doubt these large stores pay extra for supplying the cash portion. They just need to keep the cash onhand. In other countries, do they not mind paying banks a percentage of each transaction? That's a huge loss for retailers. (I also heard tipping isn't popular in some countries, maybe the lack of regard for vendors is related somehow??) Oh, plus, it's a value added service. A customer is more likely to return to a store if they provide this service."]

Transferring money between two banks

['"Why? Because they can get away with it, of course. In short - why not? You may want to read the answers to this similar question (my answer is the one accepted by the OP). Who has the money? The banks, who else. I have found that some banks are capable of sending/receiving ACH transfers faster than others. I have accounts in two banks, lets call them A and B. If I send money (push) from A to B, it may take several days. But if I decide to pull the money from A to B by originating the transaction through my account at B - the money arrives the next day! So the actual transfer only takes a night, one business day. Its just the direction that matters - if the bank has to give the money out, it will do all it can (including taking 2-3 days for ""processing"") to keep the money as long as possible. But when another bank charges them - they have no choice but to pay. By the way, bank B behaves better - when I send the money from my account at B, it arrives to A the next day as well. Try a similar experiment. Instead of originating the transaction at the sender bank - try to originate it at the receiver bank, see how long it takes then for the money to appear on your account after it disappeared from the other one."', 'The US (in fact the global) banking industry is subject to Anti-Money Laundering & Counter-Terrorism funding laws, slowing down funds transfer eliminates a great deal of fraud.']