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Should I deduct or capitalize the cost to replace a water heater in my rental property? (details Below)

["If you're repairing an existing appliance - its an expense. If you're replacing an existing appliance with a new one - that's disposing of one capital asset and putting in service another. You depreciate the new one and you dispose of the old one (if not fully depreciated - talk to your tax adviser how to handle the remaining value). The additional costs of the fixes that are not related to the installation of the new appliance are regular maintenance expenses, so you have to get an itemized invoice from the plumber to know what to expense and what to capitalize.", 'Pub 527 my friend. It gets depreciated. Table 1-1 on page 5.', 'You may be able to choose. As a small business, you can expense certain depreciable assets (section 179). But by choosing to depreciate the asset, you are also increasing the cost-basis of the property. Are you planning to sell the property in the next couple of years? Do you need a higher basis? Section 179 - Election to expense certain depreciable business assets']

What effect does a company's earnings have on the price of its stock?

['"No, the stock market is not there for speculation on corporate memorabilia. At its base, it is there for investing in a business, the point of the investment being, of course, to make money. A (successful) business earns money, and that makes it valuable to its owners since that money can be distributed to them. Shares of stock are pieces of business ownership, and so are valuable. If you knew that the business would have profit of $10,000,000 every year, and would distribute that to the owners of each of its 10,000,000 shares each year, you would know to that each share would receive $1 each year. How much would such a share be worth to you? If you could instead put money in a bank and get 5% a year back, to get $1 a year back you would have to put $20 into the bank. So maybe that share of stock is worth about $20 to you. If somebody offers to sell you such a share for $18, you might buy it; for $23, maybe you pass up the offer. But business is uncertain, and how much profit the business will make is uncertain and will vary through time. So how much is a share of a real business worth? This is a much harder call, and people use many different ways to come up with how much they should pay for a share. Some people probably just think something like ""Apple is a good company making money, I\'ll buy a share at whatever price it is being offered at right now."" Others look at every number available, build models of the company and the economy and the risks, all to estimate what a share might be worth, more or less. There is no indisputable value for a share of a successful business. So, what effect does a company\'s earnings have on the price of its stock? You can only say that for some of the people who might buy or sell shares, higher earnings will, all other thing being equal, have them be willing to spend more to buy it or demand more when selling it. But how much more is not quantifiable but depends on each person\'s approach to the problem. Higher earnings would tend to raise the price of the stock. Yet there are other factors, such as people who had expected even higher earnings, whose actions would tend to lower the price, and people who are OK with the earnings now, but suspect trouble for the business is appearing on the horizon, whose actions would also tend to lower the price. This is why people say that a stock\'s price is determined by supply and demand."', "A common (and important) measure of a stock's value is the price/earnings ratio, so an increase in earnings will normally cause the stock price to increase. However, the price of the stock is based on a guess of the value of the company some time (6 months?) in the future. So an increase in earnings today probably makes a higher earnings more likely in the future, and puts upward pressure on the price of the stock. There are a lot of other factors in stock prices, such as publicity, dividends, revenue, trends, company stability, and company history. Earnings is a very important factor, but not the only factor determine the value (and so stock price) of a company.", "Your autograph analogy seems relevant to me. But it is not just speculation. In the long run, investing in stocks is like investing in the economy. In the long run, the economy is expected to grow , hence stock prices are expected to go up. Now in theory: the price of any financial instrument is equal to the net present value today of all the future cash flows from the instrument. So if company's earnings improve, shareholders hope that the earnings will trickle down to them either in form of dividends or in form of capital gain. So they buy the stock, creating demand for it. I can try to explain more if this did not make any sense. :)", 'Market price of a stock typically trades in a range of Price/Earnings Ratio (P/E ratio). Or in other words, price of a stock = Earnings * P/E ratio Because of this direct proportionality of stock price with earnings, stock prices move in tandem with earnings.']

What types of receipts do I need to keep for itemized tax deductions?

['"I would say to only bother keeping the ones you know you\'ll use for itemized deductions. This includes any unreimbursed business expenses and vehicle licensing fees. There are a lot of other itemized tax deductions possible, but those are two common ones. Also, keep track of your business mileage (mileage before and after the trip, and commuting doesn\'t count as ""business mileage""). You may also want to keep receipts of all out-of-state purchases if your state is one of those that tries to collect state tax on out-of-state purchases. Ensure your supported charities are 501(c)(3), and they\'ll give you a receipt at the end of the year. Don\'t bother keeping fast food or gas receipts (unless they\'re business expenses)."', "I err on the side of saving all of mine for a while. Just toss them in a box at least. A years' worth is about the size of a shoebox. I started doing this because one year, about a week after I tossed my receipts for the year, I realized that I had a fair bit of allotment left on my flexible savings account to use up. I could have used those to substantiate over-the-counter medicines I purchased. Even if you don't use them for tax purposes, you can use them for budget-tracking purposes.", "Businesses are only required to keep receipts over $751. However for individuals, I would throw them all in a shoebox and not worry about organizing them. There's a small chance you'll need to go through them during an audit, and you can worry about reconciling all of them and putting them in order at that point. Just write 2010 on the box and keep it somewhere easy, and at the end of the year throw it in your basement (or get a scanner, and scan and trash the original)."]

Are COBRA premiums deductible when self-employed?

['"The basic idea is that the average person can\'t deduct health care costs unless they\'re really onerous. But a business can, and as a self-employed person, you can deduct those costs from the businesses earnings... as long as the business is really generating enough profit to cover the health insurance costs. That\'s why most people get their health insurance from their employer, actually. The relevant IRS rules say: ""You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for you, your spouse, and your dependents if you are... A self-employed individual with a net profit reported on Schedule C (Form 1040)."" For 2010, thanks to the Small Business Jobs Act of 2010, you can even deduct the premium from your income before deducting the self-employment tax (Source). I\'m sure that when you get your tax returns and instructions for 2010 this will all be spelled out."', '"I am very late to this forum and post - but will just respond that I am a sole proprietor, who was just audited by the IRS for 2009, and this is one of the items that they disallowed. My husband lost his job in 2008, I was unable to get health insurance on my own due to pre-existing ( not) conditions and so we had to stay on the Cobra system. None of the cost was funded by the employer and so I took it as a SE HI deduction on Line 29. It was disallowed and unfortunately, due to AGI limits, I get nothing by taking it on Sch. A. The auditor made it very clear that if the plan was not in my name, or the company\'s name, I could not take the deduction above the line. In his words, ""it\'s not fair, but it is the law!"""', 'http://www.ehow.com/about_4625753_cobra-as-selfemployed-health-insurance.html This link makes it clear... it has to be itemized, and is subject to the > than 7.5% AGI rule.', 'When you take the self employed health care deduction on on Line 29 of form 1040 for 2010 it also will lower your self employment tax. See line 3 of Schedule SE. You report your net earnings from self employment less line 29 from 1040.', "COBRA premiums are not deductible on 1040 line 29; to qualify, the IRS says the insurance plan must be in your name (COBRA is in your former employer's name). H&R Block confirms this.", "Here is a quote from the IRS website on this topic: You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance can also cover your child who was under age 27 at the end of 2011, even if the child was not your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. One of the following statements must be true. You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 14, code A. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. For more information, see Form 1040X, Amended U.S. Individual Income Tax Return. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. Take the deduction on Form 1040, line 29."]

What U.S. banks offer two-factor authentication (such as password & token) for online banking?

['"StasM, It\'s taken a while but many banks offer tokens - although they tend to limit the accounts for which they will be issued. All of the following issue tokens, but there are many more: CitiBank JP Morgan Union Bank Wells Fargo Callaway Bank Wachovia Bank of North Dakota The River Bank of Wisconsin Metcalf Bank, Kansas Stonebridge Bank In 2005 federal regulators stipulated that banks needed to get better with security for online banking customers, but they did not endorse a particular technology. Tokens (aka fobs) were endorsed. The news was negatively received by the banks because putting more steps in the way of a customer drives the customer away. See this 2005 report for more info: http://www.usatoday.com/tech/news/computersecurity/2005-11-02-cybercrime-prevention_x.htm My guess is a tipping point was reached since then, where customers became savvy of the risks, and that the ""extra steps"" became less an issue than the ""extra security""."', "There are very few banks which offer two-factor authentication. Part of the reason is cost. Providing a token to every account-holder is expensive, not just in the device or system, but in providing support and assistance to the millions of people who won't have the faintest idea how it works and complain that they no longer have access to their accounts. That said, it is sometimes available on request for personal accounts and many banks require it for their business clients. My HSBC Business account comes with two-factor as default and it works extremely well. There is also the pseudo-two-factor security offered by Visa and MasterCard (3-D secure) which performs a similar function.", "E*Trade offers banking services, and will provide you with a security token free if you have sufficient assets there ($50,000). Otherwise they'll charge you a $25 fee.", 'Bank of America supports two-factor authentication using SMS messages, similar to PayPal. You can enable the feature from Online Banking under Customer Service -> SafePass Settings. Update: Over the weekend of July 28th, 2012, the SafePass control on the authentication page was updated to simple HTML + JavaScript instead of Flash, so that it is now possible to login from Safari on iOS, among others.', "Some credit unions also offer them and support Business banking as well. First Tech Credit Union is a great example. They also have the most security-oriented banking website I've seen to date. https://www.firsttechfed.com/ As a side note I've found that Credit Unions are a MUCH better deal for personal and business banking.", "USAA does - that's my bank. Wells Fargo tries to determine whether the online activity is a risk; if it is, they'll require an SMS code or phoned code be entered. You can get a fairly definitive list of online companies at twofactorauth.org."]

Strategies to guarantee arrival time for transfers between banks

['Transfers are defined to arrive on a specific number of business days, nearly always one business day (if you submit it before the cutoff time). The exact number of days depends on the receiver bank, but when you try to create a transfer, it will tell you when it will arrive, before you send it out.']

How often do stocks become worthless?

['"The only thing that makes a stock worthless is when the company goes out of business. Note that bankruptcy, by itself, does not mean the company is closing. It could successfully restructure its affairs and come out of bankruptcy with a better outlook. Being a small or unprofitable business may cause a company\'s to trade in the ""penny stock"" range, but there is still some value there. Since most dying companies will pass through the penny stock phase, you may be able to track down what you\'re looking for by finding companies who have been (or are about to be) delisted. Delisting is not death, it\'s just the point at which the company\'s shares no longer meet the qualifications to be traded on a particular exchange. If you find old stock certificates in your grandmother\'s sock drawer, they may be a treasure, or they may be worthless pieces of paper if the company changed its ownership and Grandma didn\'t know about it."', "Randomly selected stocks would probably become worthless at a similar rate of all businesses going out of business do. I'm not sure why you'd randomly select a stock though. Stocks in the S&P500 (or other similar index), or large-cap stocks probably become worthless at a much lower rate."]

Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building?

['"Remember that risk should correlate with returns, in an investment. This means that the more risk you take on, the more return you should be receiving, in an efficient marketplace. That\'s why putting your money in a savings account might earn you <1% interest right now, but putting money in the stock market averages ~7% returns over time. You should be very careful not to use the word \'interest\' when you mean \'returns\'. In your post, you are calling capital gains (the increase in value of owned property) \'interest\'. This may be understating in your head the level of risk associated with property ownership. In the case of the bank, they are not in the business of home construction. Rather than take that risk themselves, they would rather finance many projects being done by construction companies that know the business. The bank has a high degree of certainty of getting its money back, because its mortgages are protected by the value of the property. Part of the benefit of an efficient marketplace is that risk gets \'bought\' by individuals who want it. This means that people with a low-risk tolerance (such as banks, people on fixed incomes, seniors, etc.) can avoid risk, and people with a high risk tolerance (stock investors, young people with high income, etc.) can take on that risk for higher average returns. The bank\'s reasoning should remind you of the risk associated with property ownership: increases in value are not a sure thing. If you do not understand the risk of your investment, you cannot be certain that you are being well compensated for that risk. Note also that most countries place regulations on their banks that limit the amount of their funds that can be placed in \'higher risk\' asset classes. Typically, this something along the lines of ""If someone places a deposit with your bank, you can only invest that deposit in a low-risk debt-based asset [ie: you can take money deposited by customer A and use it to finance a mortgage for customer B]"". This is done in an attempt to prevent collapse of the financial sector, if risky investments start failing."', "Grade 'Eh' Bacon answers it well, the issue is risk. To explain further, when a bank issues a loan, that loan comes with certain legal rights. If the bank decided to partner with a construction company, many of those rights to collect would be gone. Debt is treated differently than equity in the legal system. Banks are good at debt, investors are good at equity. We also oversimplify it by asking why banks don't prefer equity to debt. Some investment banks also like to deal in equity, so it's probably an inaccurate assumption that you start with.", '"The most succinct answer is ""Banks are in the Money business"". Not construction, not real estate, not any of the other things they may find find themselves sometimes being dragged (foreclosure) or tempted (construction) into. ""Money"" is their core competence, and as good business people they recognize that straying outside that just dilutes their focus."', '"Assumption - you live in a country like Australia, which has ""recourse"" mortgages. If you buy the apartment and take out a mortgage, the bank doesn\'t care too much if your apartment gets built or not. If the construction fails, you still owe the bank the money."', "Why should a bank get into construction specifically? Lots of business opportunities require capital. Conceivably banks could build factories, develop consumer electronics, complete with SpaceX, etc. It's all capital in, profits out, with varying levels of risk and returns. There's nothing special about constructing apartments. The reason banks don't run businesses is because there are plenty of private firms that compete with each other for business. What's the chance that a bank, with all its bureaucracy, can deliver cheaper apartments than an apartment developer? Pretty low in fact, and that's why they would rather lend to an apartment developer rather than building the apartments themselves. Banks are in the business of competing with other banks. The main work they do is to sort out good investments from poor ones. And if they can do that just a bit more efficiently than their competitors, they make big bucks. For example, it might only take a few additional hours to better vet a deal worth millions. Whereas with an apartment building, you wouldn't be able to make that amount of money per hour even if the materials and labor cost you nothing.", '"Historically, Banks are mandated to take relatively safe risks with their money. In exchange, they gain a de-facto permission to invent new money. They have regulations about what mix of assets they are permitted to own. Real estate speculation will be in a different category than a mortgage to someone with good credit. Second, mortgages with a secured asset are pretty safe almost all of the time. That person might stop paying their mortgage, but it is secured; when that happens, the bank gets the secured asset (the right-to-apartment or house or what have you). In a sense, the bank loses only if both the person paying the mortgage is less creditworthy than they look, and the secured asset cannot recoup their losses. In comparison, the person paying the mortgage loses if the secured asset cannot recoup their losses. The bank is buffered from risk two fold. What more, the bank uses the customer to determine what to invest in. Deciding what to do with money is expensive and hard. By both having a customer willing to put their good credit on the line and doing due diligence on the apartment, the Bank in effect uses you as a consultant who decides this may be a solid investment. Much of the risk of failure is on you, so you have lots of incentive to make a good choice. If the Bank was instead deciding which apartment where worth buying, who would decide? A bank employee, whose bonus this year depends on finding a ""great apartment to invest in?"", but the consequence of a bad choice doesn\'t show up for many years? The people selling the bank the apartments? Such a business can exist. There are real estate companies that take money, and invest it in real estate. Often the borrow money from Banks secured against their existing real estate and use it to build more real estate. (Notice the bit about it being secured against existing real estate; things go south, Bank gets stuff). The Bank\'s indirect investment in that apartment in the current system is covered by appraisals, the seller, the mortgage holder, and the system deciding that the mortgage holder is creditworthy. Banks sell risk. They lend you money, you go off and do something risky with it, and they get a the low-risk return on investment of your loan. Multiple such low-risk investments provides them with a relatively dependable stream of money, which they give out to their bondholders, deposit account customers, shareholders or what have you. When you take a mortgage out for that, you are buying risk from the bank. You are more exposed to the failure of the investment than they are. They get less return if things go really well."', "Banks should be risk averse by default. They make loans to people and businesses after measuring their ability to repay. After they approve a big project loan like an apartment building, they don't give all the money to the builders upfront. They give money as progress is made and they make sure the funds are not being used inappropriately. There's no reason they couldn't do all this while owning the project, but that would also open them to lawsuits later on if anything wasn't built to code. By keeping the project at arm's length, they avoid future liability.", 'The core competency of banks is to lend money from depositors and re-lend that money to borrowers. They do not have the expertise to develop real estate. They have trouble evening managing foreclosed real estate, such that they have to sell them at a discount.', "You seem to underestimate the risk of this deal for the inverstors. A person purchasing a residence is happy to pay $70K instead of $150K now, and the only risk they take is that the construction company fails to build the condo. Whatever happens on the estate market in two years, they still saved the price difference between the price of complete apartments and to-be-build apartments (which by the way may be less than $150K-$70K, since that $150K is the price on a hot market in two years). However, an investor aiming to earn money counts on that the property will actually cost $150K in two years, so he's additionally taking the risk that the estate market may drop. Should that happen, their return on investment will be considerably lower, and it's entirely possible they will make a loss instead of a profit. At this point, this becomes yet another high risk investment option, like financing a startup."]

If I pay taxes on my earnings, would someone also pay taxes on the same earnings if I subcontract them and pay a share?

["If you want to subcontract some of your excess work to somebody else, you better be in business!\xa0 While some kinds of employees (e.g. commissioned salespeople) are permitted to deduct some expenses on their income tax, generally only a real business can deduct wages for additional employees, or the cost of services provided by subcontractors. Do you invoice your clients and charge HST (GST)? Or do you tell your clients each pay period how many hours you worked and they compensate you through their payroll system like everybody else that walks through the door? If you're not invoicing and charging HST (GST) (assuming you exceed the threshold, and if you have too much work, you probably do!), then perhaps your clients are treating you as an employee – by default – and withholding taxes, CPP, and EI so they don't get in trouble? After all, Canada Revenue Agency is likely to consider any person providing a service to a company to be an employee unless there is sufficient evidence to the contrary, and when there isn't enough evidence, it's the company paying for the services that would be on the hook for unpaid taxes, CPP, and EI. Carefully consider what form of business you are operating, or were intending to operate. It's essential for your business to be structured appropriately if you want to hire or subcontract. You ought to be either self-employed as a sole proprietor, or perhaps incorporated if it makes more sense to your situation. Next, act accordingly. For instance, it's likely that your business should be taking care of the source deductions, CPP, and EI. In fact, self-employed individuals shouldn't even be paying into EI – an independent contractor wouldn't qualify to make an EI claim if they lost a contract. As an independent, one doesn't have a job, one has a business, and EI doesn't cover the business itself, only the employees that the business deals with at arm's length. As a business owner, you would be considered non-arms-length, and exempt from EI. Growing your business in the way that you are suggesting is an important enough a step that you should seek professional advice in advance. Find a good accountant that deals with self-employed individuals & small businesses and run all this by him. He should be able to guide you accordingly. Find a lawyer, too. A lawyer can guide you on how to properly subcontract others while protecting you and your business. Finally, be mindful of what it is you agreed to in your contract with your client: Do they expect all services to be performed by you, personally? Even if it wasn't written down who exactly would be performing the services, there may be an assumption it's you. Some negotiation may be in order if you want to use subcontractors."]

Why is there such disparity of max contribution limits between 401K accounts and regular IRA accounts?

['The 401k was not written with the specific intent of enabling retirement savings. Why do tax advantages favor employees of large employers... It seems that large businesses have been more effective at influencing legislators despite that there are more people are employed by small than large businesses.', 'IRAs were invented to help individuals save for retirement. 401(k)s were invented to help corporations provide more compensation to highly valued employees.', "The investments offered in 401K are usually limited to a selection of mutual funds offered by a 401K provider. The 401K providers and the mutual funds charge fees. The mutual fund industry has a lobbying group that will push for increased 401K contributions to direct money into their mutual funds to collect fees. The top 401 K provider in 2005 was fidelity. It managed $337 billion in 401Ks of which $334 billion was directed into mutual funds. Although I would have to use some of the same providers to open an IRA, I would not have to invest in the providers' mutual funds when I open an IRA. I can buy a stock and hold onto it for 10, 20, 50 years inside of my IRA. Thus, the only fee the investment company would collect from me would be from when I purchased the stock and when I sold the stock. Not nearly as profitable as mutual fund fees."]

What options do I have at 26 years old, with 1.2 million USD?

["The amount of money you have should be enough for you to live a safe but somewhat restricted life if you never worked again - but it could set you up for just about any sort of financial goal (short of island buying) if you do just about any amount of work. The basic math for some financial rules of thumb to keep in mind: If your money is invested in very low-risk ways, such as a money market fund, you might earn, say, 3% in interest every year. That's $36k. But, if you withdraw that $36k every year, then every year you have the same principal amount invested. And a dollar tomorrow can't buy as much as a dollar today, because of inflation. If we assume for simplicity that inflation is 1% every year, then you need to contribute an additional $12k to your principal balance every year, just so that it has the same buying power next year. This leaves you with a net $24k of interest income that you can freely spend every year, for the rest of your life, without ever touching your principal balance. If your money is invested more broadly, including equity investments [stocks], you might earn, say, 7% every year. Some years you might lose money on your investments, and would need to draw down your principal balance to pay your bills. Some years you might do quite well - but would need to remain conservative and not withdraw your 'excess' earnings every year, because you will need that 'excess' to make up for the bad years. This would leave you with about $74k of income every year before inflation, and about $62k after inflation. But, you would be taking on more risk by doing this. If you work enough to pay your daily bills, and leave your investments alone to earn 7% on average annually, then in just 10 years your money would have doubled to ~ $2.4 Million dollars. This assumes that you never save another penny, and spend everything you make. It's a level of financial security that means you could retire at a drop of the hat. And if don't start working for 20 years [which you might need to do if you spend in excess of your means and your money dries up], then the same will not be true - starting work at 45 with no savings would put you at a much greater disadvantage for financial security. Every year that you work enough to pay your bills before 'retirement' could increase your nest egg by 7% [though again, there is risk here], but only if you do it now, while you have a nest egg to invest. Now in terms of what you should do with that money, you need to ask yourself: what are your financial goals? You should think about this long and hard (and renew that discussion with yourself periodically, as your goals will change over time). You say university isn't an option - but what other ways might you want to 'invest in yourself'? Would you want to go on 'sabbatical'-type learning trips? Take a trade or learn a skill? Start a business? Do you want to live in the same place for 30 years [and thus maybe you should lock-down your housing costs by buying a house] or do you want to travel around the world, never staying in the same place twice [in which case you will need to figure out how to live cheaply and flexibly, without signing unnecessary leases]. If you want to live in the middle of nowhere eating ramen noodles and watching tv, you could do that without lifting a finger ever again. But every other financial goal you might have should be factored into your budget and work plan. And because you do have such a large degree of financial security, you have a lot of options that could be very appealing - every low paying but desirable/hard-to-get job is open to you. You can pursue your interests, even if they barely pay minimum wage, and doing so may help you ease into your new life easier than simply retiring at such a young age [when most of your peers will be heavy into their careers]. So, that is my strongest piece of advice - work now, while you're young and have motivation, so that you can dial back later. This will be much easier than the other way around. As for where you should invest your money in, look on this site for investing questions, and ultimately with that amount of money - I suggest you hire a paid advisor, who works based on an hourly consultation fee, rather than a % management fee. They can give you much more directed advice than the internet (though you should learn it yourself as well, because that will give you the best piece of mind that you aren't being taken advantage of).", '"Pay off the credit cards. From now on, pay off the credit cards monthly. Under no circumstances should you borrow money. You have net worth but no external income. Borrowing is useless to you. $200,000 in two bank accounts, because if one bank collapses, you want to have a spare while you wait for the government to pay off the guarantee. Keep $50,000 in checking and another $50k in savings. The remainder put into CDs. Don\'t expect interest income beyond inflation. Real interest rates (after inflation) are often slightly negative. People ask why you might keep money in the bank rather than stocks/bonds. The problem is that stocks/bonds don\'t always maintain their value, much less go up. The bank money won\'t gain, but it won\'t suddenly lose half its value either. It can easily take five years after a stock market crash for the market to recover. You don\'t want to be withdrawing from losses. Some people have suggested more bonds and fewer stocks. But putting some of the money in the bank is better than bonds. Bonds sometimes lose money, like stocks. Instead, park some of the money in the bank and pick a more aggressive stock/bond mixture. That way you\'re never desperate for money, and you can survive market dips. And the stock/bond part of the investment will return more at 70/30 than 60/40. $700,000 in stock mutual funds. $300,000 in bond mutual funds. Look for broad indexes rather than high returns. You need this to grow by the inflation rate just to keep even. That\'s $20,000 to $30,000 a year. Keep the balance between 70/30 and 75/25. You can move half the excess beyond inflation to your bank accounts. That\'s the money you have to spend each year. Don\'t withdraw money if you aren\'t keeping up with inflation. Don\'t try to time the market. Much better informed people with better resources will be trying to do that and failing. Play the odds instead. Keep to a consistent strategy and let the market come back to you. If you chase it, you are likely to lose money. If you don\'t spend money this year, you can save it for next year. Anything beyond $200,000 in the bank accounts is available for spending. In an emergency you may have to draw down the $200,000. Be careful. It\'s not as big a cushion as it seems, because you don\'t have an external income to replace it. I live in southern California but would like to move overseas after establishing stable investments. I am not the type of person that would invest in McDonald\'s, but would consider other less evil franchises (maybe?). These are contradictory goals, as stated. A franchise (meaning a local business of a national brand) is not a ""stable investment"". A franchise is something that you actively manage. At minimum, you have to hire someone to run the franchise. And as a general rule, they aren\'t as turnkey as they promise. How do you pick a good manager? How will you tell if they know how the business works? Particularly if you don\'t know. How will you tell that they are honest and won\'t just embezzle your money? Or more honestly, give you too much of the business revenues such that the business is not sustainable? Or spend so much on the business that you can\'t recover it as revenue? Some have suggested that you meant brand or stock rather than franchise. If so, you can ignore the last few paragraphs. I would be careful about making moral judgments about companies. McDonald\'s pays its workers too little. Google invades privacy. Exxon is bad for the environment. Chase collects fees from people desperate for money. Tesla relies on government subsidies. Every successful company has some way in which it can be considered ""evil"". And unsuccessful companies are evil in that they go out of business, leaving workers, customers, and investors (i.e. you!) in the lurch. Regardless, you should invest in broad index funds rather than individual stocks. If college is out of the question, then so should be stock investing. It\'s at least as much work and needs to be maintained. In terms of living overseas, dip your toe in first. Rent a small place for a few months. Find out how much it costs to live there. Remember to leave money for bigger expenses. You should be able to live on $20,000 or $25,000 a year now. Then you can plan on spending $35,000 a year to do it for real (including odd expenses that don\'t happen every month). Make sure that you have health insurance arranged. Eventually you may buy a place. If you can find one that you can afford for something like $100,000. Note that $100,000 would be low in California but sufficient even in many places in the US. Think rural, like the South or Midwest. And of course that would be more money in many countries in South America, Africa, or southern Asia. Even southern and eastern Europe might be possible. You might even pay a bit more and rent part of the property. In the US, this would be a duplex or a bed and breakfast. They may use different terms elsewhere. Given your health, do you need a maid/cook? That would lean towards something like a bed and breakfast, where the same person can clean for both you and the guests. Same with cooking, although that might be a second person (or more). Hire a bookkeeper/accountant first, as you\'ll want help evaluating potential purchases. Keep the business small enough that you can actively monitor it. Part of the problem here is that a million dollars sounds like a lot of money but isn\'t. You aren\'t rich. This is about bare minimum for surviving with a middle class lifestyle in the United States and other first world countries. You can\'t live like a tourist. It\'s true that many places overseas are cheaper. But many aren\'t (including much of Europe, Japan, Australia, New Zealand, etc.). And the ones that aren\'t may surprise you. And you also may find that some of the things that you personally want or need to buy are expensive elsewhere. Dabble first and commit slowly; be sure first. Include rarer things like travel in your expenses. Long term, there will be currency rate worries overseas. If you move permanently, you should certainly move your bank accounts there relatively soon (perhaps keep part of one in the US for emergencies that may bring you back). And move your investments as well. Your return may actually improve, although some of that is likely to be eaten up by inflation. A 10% return in a country with 12% inflation is a negative real return. Try to balance your investments by where your money gets spent. If you are eating imported food, put some of the investment in the place from which you are importing. That way, if exchange rates push your food costs up, they will likely increase your investments at the same time. If you are buying stuff online from US vendors and having it shipped to you, keep some of your investments in the US for the same reason. Make currency fluctuations work with you rather than against you. I don\'t know what your circumstances are in terms of health. If you can work, you probably should. Given twenty years, your million could grow to enough to live off securely. As is, you would be in trouble with another stock market crash. You\'d have to live off the bank account money while you waited for your stocks and bonds to recover."', "You need the services of a hard-nosed financial planner. A good one will defend your interests against the legions of creeps trying to separate you from your money. How can you tell whether such a person is working in your best interest? Here are some ways. You'll be able to tell pretty quickly whether the planner lets you get through the same story you told us. The ability to listen carefully without interrupting is a good way to tell whether the planner is going to honor your needs. You're looking for a human service professional, not an investment or business guru. There are planners who specialize in helping people navigate big changes in their financial situation. Some of the best of those planners are women. (Many of their customers are people whose spouses recently died. But they also serve people in your situation. Ask if they work with other people like you.) Of course, you need to take the planner's advice, especially about spending and saving levels.", '"Until you get some financial education, you will be vulnerable to people wanting your money. Once you are educated, you will be able to live a tidy life off this-- which is exactly why this amount was awarded to you, rather than some other amount. They gave you enough money. This is not a lottery win. I mean ""financial counselors"" who will want to help you with strategies to invest your money. Every one will promise your money will grow. The latter case describes every full-service broker, e.g. what will happen if you walk into EdwardJones. This industry has a long tradition of charmingly selling investments which significantly underperform the market, and making their money by kickbacks (sales commissions) from those investments (which is why they significantly underperform.) They also offer products which are unnecessarily complex meant to confuse customers and hide fees. One mark of trouble is ""early exit"" fees, which they need to recoup the sales commission they already paid out. Unfortunately, one of those people is you. You are treating this like a windfall, falling into old, often-repeated cliché of ""lottery-win thinking"". ""Gosh, there\'s so much money there, what could go wrong?"" This always ends in disaster and destitution, on top of your other woes. It\'s not a windfall. They gave you just enough money to live on - barely. Because these lawyers and judges do this all day every day, and they know exactly how much capital will replace a lifelong salary, and if anything you got cheated a bit. Read on. You don\'t want to feel like greedy Scrooge, hoarding every penny. I get that. But generous spending won\'t fix that. What will is financial education, and once you have real understanding and certainty about your financial situation, you will be able to both provide for yourself and be giving in a sensible manner. This stuff isn\'t taught in school. If it was, there\'d be a lot more millionaires, because wealth isn\'t about luck, it\'s about intelligent management of money. Good advisers do exist. They\'re hard to find. Good advisors work only one way: for a flat rate or hourly fee. This is called a ""Fee-only advisor"". S/he never takes commissions. Beware of brokers who normally work on commission but will happily take an upfront fee. Even if they promise to hand you their commission check, they\'re still recommending you into the same sub-par investments because that\'s their training! I get the world of finance is extremely confusing and it\'s hard to know where to start. Just make one leap of faith with me: You can learn this. One place it\'s not confusing: University endowments. They get windfalls just like you, and they need to manage it to support them for a very long time, just like you. Endowments are very closely watched by the smartest people in finance -- no lottery fever here. It\'s agreed by all that there is one best way to invest an endowment. And it\'s mandatory by law. An endowment is a chunk of money (say, $1.2 million) that must fund a purpose (say, a math professorship or ""chair"") in perpetuity. You\'re not planning to live quite that long, but when you\'re in your 20\'s, the investment strategy is the same. The endowment is designed to generate income of some amount, on average, over the long term. You can draw from the endowment even in ""down years"". The rule of thumb is 4-6% is a sustainable rate that won\'t overtax the endowment (usually, but you have to keep an eye on it). On $1.2M, that\'s $48,000 to $72,000 per year. Not half bad. See, I told you it could work. Read Jane Austen? Mister Darcy, referred to as a gentleman of 10,000 pounds -- meaning his assets were many times that, but they yield income of £10,000 a year. Same idea. Keep in mind that you need to pay taxes. But if you plan your investments so you\'re holding them more than a year, you\'re in the much lower 0-10-15% capital gains tax bracket. So, here\'s where I\'d like you to go. I would say more, but this will give you quite an education by itself. Say you gave all your money to me. And said ""Your nonprofit needs an executive director. Fund it. In perpetuity."" I\'d say ""Thank you"", ""you\'re right"", and I\'d create an endowment and invest it about like this. That is fairly close to the standard mix you\'ll find in most endowments, because that is what\'s considered ""prudent"" under endowment law (UPMIFA). I\'d carry all that in a Vanguard or Fidelity account and follow Bogle\'s advice on limiting fees. That said, dollar-cost-averaging is not a suicide pact, and bonds are ugly right now (for reason Suze Orman describes) and real estate seems really bubbly right now... so I\'d back out of those for now. I\'d aim to draw about $60k/year out of it or 5%, and on average, in the very long term, the capital should grow. I would adjust it downward somewhat if the next few years are a hard recession, to avoid taking too much out of the capital... and resist the urge to take more out in boom years, because that is your hedge against the next recession. Over 7% is not prudent per the law (absent very reasonable reasons). UPMIFA doesn\'t apply to you, but I\'d act as if it did. A very reasonable reason to take more than 7% would be to shift investment into a house for living in. I would aim for a duplex/triplex to also have income from the property, if the numbers made sense, which they often don\'t in California, but that\'s another question. At your financial level -- never, never, never give cash to a charity. You will get marked as a ""soft target"" and every commercial fundraiser on earth will stalk you for the rest of your life. At your level, you open a Donor Advised Fund, and let the Fund do your giving for you. Once you\'ve funded it (which is tax deductible) you later tell them which charities to fund when. They screen out fake charities and protect your identity. I discuss DAFs at length here. Now when ""charities"" harass you for an immediate handout, just tell them that\'s not how you support charities."', '"If you were the friend of my daughter or some other ""trusted"" relationship, I would tell you to head on over to Bogleheads.org, follow their advice and do research there. I would advise you to aim for about a 60/40 allocation. They would advise you to make a very simple, do it yourself portfolio that could last a lifetime. No need for financial planners or other vultures. The other side of this curtailing your spending. Although the amount seems like a bunch, you probably need to keep your spending under 41K per year out of this money. If you have additional income such as from a job or social security payments then that could be on top of the 41k and never forget taxes. To help manage that, you may want to consult a CPA, but only for tax advice, not investment advice. Certainly you should make the credit card debt disappear. You may want to reevaluate your current location if the costs are too high compared to your income. Good luck to you and sorry about the wreck."', '"Others have given a lot of advice about how to invest, but as a former expat I wanted to throw this in: US citizens living and investing overseas can VERY easily run afoul of the IRS. Laws and regulations designed to prevent offshore tax havens can also make it very difficult for expats to do effective investing and estate planning. Among other things, watch out for: US citizens owe US income tax on world income regardless of where they live or earn money FBAR reporting requirements affect foreign accounts valued over $10k The IRS penalizes (often heavily) certain types of financial accounts. Tax-sheltered accounts (for education, retirement, etc.) are in the crosshairs, and anything the IRS deems a ""foreign-controlled trust"" is especially bad. Heavy taxes on investment not purchased from a US stock exchange Some US states will demand income taxes from former residents (including expats) who cannot prove residency in a different US state. I believe California is neutral in that regard, at least. I am neither a lawyer nor an accountant nor a financial advisor, so please take the above only as a starting point so you know what sorts of questions to ask the relevant experts."', 'Since the question asked for options, rather than advice, I’ll offer a few. And you can ignore the gratuitous advice that may sneak in. There are countries that will happily give you citizenship for a fee. And others where an investment of far less than your million will get you well on your way. Having citizenship and a passport from another country can be handy if your current one is or becomes unpopular or unstable. From data at numbeo.com, I estimate that my lifestyle would cost me $3300 (US) in Geneva, Switzerland, and that everywhere else on the planet would be less. I haven’t been to Geneva, but I have spent only $2500 (average) per month in eleven countries over three years, and could have been comfortable on far less. $2500/month will go through 1.2 million in only forty years, but if you use it to generate income, and are less wasteful than me, ... With the first few dollars you get, you might take steps to hedge the possibility of not actually getting it all. Appeals can take a long time, and if the defendant runs out of money or figures out how to hide, the size of the judgment is irrelevant. Believe strongly enough in something to donate money for/to it? I’ll leave the investment options to others.', "You should invest your money. To figure out what rate of return you need, use this equation: (How Much Money You Want Per Year) / (Total Amount of Cash You Have) = (Annualized Interest Rate) If we plug in the amount of annualized interest you can expect to safely get while not managing your money personally, 2% by my estimate, we get X / 1.2m = 0.02%; X=24K/year A measly $24,000 / year. Many people say that you can get 10, 12, even 30% return on your investment. I won't speculate on if this is true, but I will guarantee that you cannot get those returns simply by handing your money over to a money manager. So your options are, 1) Earn a guaranteed $24,000 and earn the rest you need to live by working 2) Learn to invest your money (and then do so intelligently) and earn enough to live off the interest To learn how to invest your money, read Beating the Street, by Peter Lynch. https://www.amazon.ca/Beating-Street-Peter-Lynch/dp/0671891634 Good luck!", '"Former financial analyst here, happy to help you. First off, you are right to not be entirely trusting of advisors and attorneys. They are usually trustworthy, but not always. And when you are new to this, the untrustworthy ones have a habit of reaching you first - you\'re their target market. I\'ll give you a little breakdown of how to plan, and a starting investment. First, figure out your future expenses. A LOT of that money may go to medical bills or associated care - don\'t forget the costs of modifications and customizations to items so you can have a better quality of life. Cars can be retrofit to assist you with a wheelchair, you can build a chair lift into a staircase, things like that which will be important for mobility - all depending on the lingering medical conditions. Mobility and independence will be critically important for you. Your past expenses are the best predictor of future expenses, so filter out the one-time legal and medical costs and use those to predict. Second, for investing there is a simple route to get into the stock market, and hopefully you will hear it a lot: Exchange Traded Funds (ETFs). You\'ll hear ""The S&P 500 increased by 80 points today..."" on the news; the S&P is a combination of 500 different stocks and is used to gauge the market overall. You can buy an exchange traded fund as a stock, and it\'s an investment in all those components. There\'s an ETF for almost anything, but the most popular ones are for those big indexes. I would suggest putting a few hundred thousand into an S&P 500 indexed ETF (do it at maybe $10,000 per month, so you spread the money out and ensure you don\'t buy at a market peak), and then let it sit there for many years. You can buy stocks through online brokerages like Scottrade or ETrade, and they make it fairly easy - they even have local offices that you can visit for help. Stocks are the easiest way to invest. Once you\'ve done this, you can also open a IRA (a type of retirement account with special tax benefits) and contribute several thousand dollars to it per year. I\'ll be happy to give more advice if/when you need it, but there are a number of good books for beginning investors that can explain it better than I. I would suggest that you avoid real estate, especially if you expect to move overseas, as it is significantly more complicated and has maintenance costs and taxes."', "You need to find a fiduciary advisor pronto. Yes, you are getting a large amount of money, but you'll probably have to deal with higher than average health expenses and lower earning potential for years to come. You need to make sure the $1.2 million lasts you, and for that you need professional advice, not something you read on the Internet. Finding a knowledgeable advisor who has your interests at heart at a reasonable rate is the key here. These articles are a good start on what to look for: http://www.investopedia.com/articles/financialcareers/08/fiduciary-planner.asp https://www.forbes.com/sites/janetnovack/2013/09/20/6-pointed-questions-to-ask-before-hiring-a-financial-advisor/#2e2b91c489fe http://www.investopedia.com/articles/professionaleducation/11/suitability-fiduciary-standards.asp You should also consider what your earning potential is. You rule out college but at 26, you can have a long productive career and earn way more money than the $1.2 million you are going to get.", "Wow, everyone tells you different investment strategies. You have all your life ahead of you. Your main focus should not be getting the best return rate, but ensuring your existence. Who cares if you get 7% if you'll lose all in the next market crash and stand on the street with no education, no job and nothing to fall back on? I would go a completely different route in your place: The best advise given above was to not consider this as an option to never work again. It's not enough money for that, unless you want to live poorly and always be afraid that the next financial crises wipes you out completely.", "Something not in answers so far: define your goals. What is important to you? My goals, if I were in your shoes, would include a debt-free home, passive (investment) income so I would not have to work, and have health insurance covered. I could think of many more details, and already have, but you get the idea. To help determine which investment information to learn first, consider how much risk you can tolerate. I know that's vague at this point, but if you're looking for safe investments first, you could learn about mutual funds, and then index funds specifically. At the risky extreme, you could learn about stock options, but I would not recommend such risk.", '"When I was in a similar situation (due to my stocks going up), I quit my job and decided that if I live somewhat frugally, I wouldn\'t have to work again (I haven\'t). But I fell victim to some scams, didn\'t invest wisely, and tried to play as a (minor) philantropist. Bad move. I still have enough money to live on, and want to buy a home of my own, but with the rise in real estate costs in ALL the ""good"" major cities my options are very limited. There is a LOT of good advice being given here; I wish someone had given me that kind of advice years ago. $1,200,000 sounds like a lot but it\'s not infinity. Side comment: I\'ve seen lots of articles that claim to help you figure out how much money you need in retirement but why do they all start out by asking you ""how much money do you need in retirement?"""', "Firstly, sorry about the accident. I am afraid you will need to do your own legwork, because you cannot trust other people with your money. It's a good thing you do not need to rush. Take your time to learn things. One thing is certain, you cannot let your money sit in a bank - inflation will digest them. You need to learn about investing yourself, or you run a risk of someone taking advantage of you. And there are people who specialise in exploiting people who have money and no idea what to do with them. There is no other way, if you have money, you need to know how to deal with it, or you are likely to lose it all. Since you need to have monthly income and also income that makes more money to make further investments, you need to look at two most common investments that are safe enough and also give good returns on investment: Property and index funds. You might also have a look at National bonds as this is considered safest investment possible (country has to go bust for you to lose money), but you are too young for that. Young = you can take more risk so Property and shares (indexes). You want to have your property investments in a country that is stable and has a good ROI (like Netherlands or Lithuania). Listen to some audio lectures: https://www.audible.co.uk/pd/Health-Personal-Development/Investing-in-Real-Estate-6th-Edition-Audiobook/B008SEH1R0 https://www.audible.co.uk/pd/Business/The-Secrets-of-Buy-to-Let-Success-Audiobook/B00UVVM222 https://www.audible.co.uk/pd/Non-fiction/Economics-3rd-Edition-Audiobook/B00D8J7VUC https://www.audible.co.uk/pd/Advanced-Investments-Part-1-Audiobook/B00HU81B80 After you sorted your investment strategy, you might want to move to a country that is Expat friendly and has lower living costs than US and you should be able to live like a king... best of luck.", "I'm surprised nobody else has suggested this yet: before you start investing in stocks or bonds, buy a house. Not just any house, but the house you want to live in 20 years from now, in a place where you want to live 20 years from now - but you also have to be savvy about which part of the country or world you buy in. I'm also assuming that you are in the USA, although my suggestion tends to apply equally anywhere in the world. Why? Simple: as long as you own a house, you won't ever have to pay rent (you do have to pay taxes and maintenance, of course). You have a guaranteed return on investment, and the best part is: because it's not money you earn but money you don't have to spend, it's tax free. Even if the house loses value over time, you still come out ahead. And if you live abroad temporarily, you can rent out the house and add the rent to your savings (although that does make various things more complicated). You only asked for options, so that is mine. I'll add some caveats. OK, now here are the caveats:", "If you can still work, I think a very good course of action would be to invest the majority of the money in low-cost index funds for many years. The reason is that you are young and have plenty of time to build a sizable retirement fund. How you go about this course of action depends on your comfort level with managing your money, taxes, retirement accounts, etc. At a minimum, open an investment account at any of the major firms (Schwab, Fidelity, for example). They will provide you with a free financial advisor. Ideally s/he would recommend something like: Open a retirement account and invest as much as you can tax-free or tax-deferred. Since you already received the money tax-free, a Roth IRA seems like a no-brainer. Pick some low-fee equity funds, like an S&P 500 Index fund, for a large chunk of the money. Avoid individual stocks if you aren't comfortable with them. Alternatively, get a recommendation for a fixed-fee financial planner that can help you plan for your future. Above all, don't spend beyond your means! You have an opportunity to fund a very nice future for yourself, especially if you are able to work while you are still so young!", '"I agree with Grade \'Eh\' Bacon\'s answer, but there are a couple of ideas that are relevant to your particular situation: If I were you, I would invest at least half of the cash in growth ETFs because you\'re young enough that market variability doesn\'t affect you and long term growth is important. The rest should be invested in safer investments (value and dividend ETFs, bonds, cash) so that you have something to live off in the near term. You said you wanted to invest ethically. The keyword to search is ""socially responsible ETFs"". There are many, and if this is important to you, you\'ll have to read their prospectus to find one that matches your ethics. Since you\'re American, the way I understand it, you need to file taxes on income; selling stocks at a gain is income. You want to make sure that as your stocks appreciate, you sell some every year and immediately rebuy them so that you pay a small tax bill every year rather than one huge tax bill 20 years from now. Claiming about $20600 of capital gains every year would be tax free assuming you are not earning any other money. I would claim a bit more in years where you make a lot. You can mitigate your long term capital gains tax exposure by opening a Roth IRA and maxing that out. Capital gains in the Roth IRA are not taxable. Even if you don\'t have income from working, you can have some income if you invest in stocks that pay dividends, which would allow you to contribute to a Roth IRA. You should figure where you\'re going to be living because you will want to minimize the currency risk of having your money in USD while you\'re living abroad. If the exchange rate were to change by a lot, you might find yourself a lot poorer. There are various hedging strategies, but the easiest one is to invest some of your money in securities of the country you\'ll be living in. You should look into how you\'ll be converting money into the foreign currency. There are sometimes way of minimizing the spread when converting large amounts of money, e.g., Norbert\'s gambit. Shaving off 1.5% when exchanging $100k saves $1500."', '"This may be a great idea, or a very bad one, or it may simply not be applicable to you, depending on your personal circumstances and interests. The general idea is to avoid passive investments such as stocks and bonds, because they tend to grow by ""only"" a few percent per year. Instead, invest in things where you will be actively involved in some form. With those, much higher investment returns are common (but also the risk is higher, and you may be tied down and have to limit the traveling you want to do). So here are a few different ways to do that: Get a college degree, but only if you are interested in the field, and it ends up paying you well. If you aren\'t interested in the field, you won\'t land the $100k+ jobs later. And if you study early-childhood education, you may love the job, but it won\'t pay enough to make it a good investment. Of course, it also has to fit with your life plans, but that might be easier than it seems. You want to travel. Have you thought about anthropology, marine biology or archeology? Pick a reputable, hard-to-get-into, academic school rather than a vocation-oriented oe, and make sure that they have at least some research program. That\'s one way to distinguish between the for-profit schools (who tend to be very expensive and land you in low-paying jobs), and schools that actually lead to a well-paying future. Or if your interest runs more in a different direction: start a business. Your best bet might be to buy a franchise. Many of the fast-food chains, such as McDonalds, will let you buy as long as you have around $300k net worth. Most franchises also require that you are qualified. It may often make sense to buy not just one franchised store, but several in an area. You can increase your income (and your risk) by getting a loan - you can probably buy at least $5 million worth of franchises with your ""seed money"". BTW, I\'m only using McDonalds as an example. Well-known fast food franchises used to be money-making machines, but their popularity may well have peaked. There are franchises in all kinds of industries, though. Some tend to be very short-term (there is a franchise based on selling customer\'s stuff on ebay), while others can be very long-lived (many real-estate brokerages are actually franchises). Do be careful which ones you buy. Some can be a ""license to print money"" while others may fail, and there are some fraudsters in the franchising market, out to separate you from your money. Advantage over investing in stocks and bonds: if you choose well, your return on investment can be much higher. That\'s generally true for any business that you get personally involved in. If you do well, you may well end up retiring a multimillionaire. Drawback: you will be exposed to considerable risk. The investment will be a major chunk of your net worth, and you may have to put all your eggs in none basket. If your business fails, you may lose everything. A third option (but only if you have a real interest in it!): get a commercial driver\'s license and buy an 18-wheeler truck. I hear that owner-operators can easily make well over $100k, and that\'s with having to pay off a bank loan. But if you don\'t love trucker culture, it is likely not worth doing. Overall, you probably get the idea: the principle is to use your funds as seed money to launch something profitable and secure, as well as enjoyable for you."', "Windfalls can disappear in a heartbeat if you're not used to managing large amounts of money. That said, if you can read a bank statement and can exercise a modicum of self control over spending, you do not need a money manager. (See: Leonard Cohen) First, spend $15 on J.L. Collins' book The Simple Path to Wealth. https://www.goodreads.com/book/show/30646587-the-simple-path-to-wealth. Plan to spend about 4% of your wealth annually (4% of $1.2 million = $48,000) Bottom line: ALWAYS live within your means. Own your own home free and clear. Don't buy an annuity unless you have absolutely no self control. If it feels like you're spending money too fast, you almost certainly are.", "Lots of good advice so far. Here's some meta-advice. Read through everything here twice, and distill out what the big picture ideas are. Learn about what you need to know about them. Pick a strategy and/or long term goals. Work toward them. Get advice from many many places and distill it. This is currently known as crowd-sourcing but I've been doing it all my life. It's very effective. No one will ever care as much about your money as you. Some specific things I haven't seen mentioned (or not mentioned much):", "Since you mentioned moving, you can buy real state very cheap here in Mexico that will give you income monthly. I will tell you some numbers in case you're interested. Now to investments: you can buy houses for rent, and prices are as follows: Average house $25k which will give about $220 monthly of income. Let's say you buy 20 of these that would be $4400 USD monthly. Now you have a very high standard here and you will never have to work again, and each year the income will increase about 2% and you still have $576k left.", 'Buy a land and build a house. Then plant wine trees. Hire people after like 5 years and start to do and sell wine. A beautiful business :-) A second opation is to buy a houses in a city and rent rooms.', "That's what I would do; 1.2 million dollars is a lot of money, but it doesn't make you retired for the rest of your life: There is a big crisis coming soon (my personal prediction) in the next 10-15 years, and when this happens: government will hold your money if you leave them in the bank (allowing you to use just part of it; you will have to prove the reason you need it), government will pass bills to make it very hard to close your investment positions, and government will pass new laws to create new taxes for people with a lot of money (you). To have SOME level of security I would separate my investment in the following: 20% I would buy gold certificates and the real thing (I would put the gold in a safe(s)). 20% I would put in bitcoin (you would have to really study this if you are new to crypto currency in order to be safe). 40% I would invest in regular finance products (bonds, stocks and options, FX). 20% I would keep in the bank for life expenses, specially if you don't want work for money any more. 20% I would invest in startup companies exchanging high risk hoping for a great return. Those percentages might change a little depending how good/confident you become after investing, knowing about business, etc..."]

How quickly does short float ratio/percent change?

['The short float ratio and percent change are all calculated based on the short interest (the total number of shares shorted). The short interest data for Nasdaq and NYSE stocks is published every two weeks. NasdaqTrader.com shows the exact dates for when short interest is published for Nasdaq stocks, and also says the following: FINRA member firms are required to report their short positions as of settlement on (1) the 15th of each month, or the preceding business day if the 15th is not a business day, and (2) as of settlement on the last business day of the month.* The reports must be filed by the second business day after the reporting settlement date. FINRA compiles the short interest data and provides it for publication on the 8th business day after the reporting settlement date. The NYSE also shows the exact dates for when short interest is published for NYSE stocks, and those dates are exactly the same as for Nasdaq stocks. Since the short interest is only updated once every 2 weeks, there is no way to see real-time updating of the short float and percent change. That information only gets updated once every 2 weeks - after each publication of the short interest.']

Double-Taxation of Royalties paid for in Korea to a US Company

["If treaties are involved for something other than exempting student wages on campus, you shouldn't do it yourself but talk to a licensed US tax adviser (EA/CPA licensed in your state) who's well-versed in the specific treaty. Double taxation provisions generally mean that you can credit the foreign tax paid to your US tax liability, but in the US you can do that regardless of treaties (some countries don't allow that). Also, if you're a US tax resident (or even worse - a US citizen), the royalties related treaty provision might not even apply to you at all (see the savings clause). FICA taxes are generally not part of the income tax treaties but totalization agreements (social security-related taxes, not income taxes). Most countries who have income tax treaties with the US - don't have social security totalization agreements. Bottom line - talk to a licensed professional."]

Is there a way to claim a car purchase in the tax return?

["IRS Publication 463 is a great resource to help you understand what you can and can't deduct. It's not a yes/no question, it depends on the exact company use, other use, and contemporaneous record keeping.", "You've got two options. Deduct the business portion of the depreciation and actual expenses for operating the car. Use the IRS standard mileage rate of $.575/mile in 2015. Multiply your business miles by the rate to calculate your deduction. Assuming you're a sole proprietor you'll include a Schedule C to your return and claim the deduction on that form."]

Can I deduct equipment expenses for a job I began overseas?

["A computer is a special case because the IRS thinks that you might be using it for personal applications. You may need to keep a log, or be able to state that you also have another computer for non-business use. That said, if your schedule C shows a small profit then you don't need to itemize expenses, just state the total.", "I'm not an expert, but here's my $0.02. Deductions for business expenses are subject to the 2% rule. In other words, you can only deduct that which exceeds 2% of your AGI (Adjusted Gross Income). For example, say you have an AGI of $50,000, and you buy a laptop that costs $800. You won't get a write-off from that, because 2% of $50,000 is $1,000, and you can only deduct business-related expenses in excess of that $1,000. If you have an AGI of $50,000 and buy a $2,000 laptop, you can deduct a maximum of $1,000 ($2,000 minus 2% of $50,000 is $2,000 - $1,000 = $1,000). Additionally, you can write off the laptop only to the extent that you use it for business. So in other words, if you have an AGI of $50,000 and buy that $2,000 laptop, but only use it 50% for business, you can only write off $500. Theoretically, they can ask for verification of the business use of your laptop. A log or a diary would be what I would provide, but I'm not an IRS agent."]

How do we know the number of shorted shares of a stock?

["For a company listed on NASDAQ, the numbers are published on NASDAQ's site. The most recent settlement date was 4/30/2013, and you can see that it lists 27.5 million shares as held short. NASDAQ gets these numbers from FINRA member firms, which are required to submit them to the exchange twice a month: Each FINRA member firm is required to report its “total” short interest positions in all customer and proprietary accounts in NASDAQ-listed securities twice a month. These reports are used to calculate short interest in NASDAQ stocks. FINRA member firms are required to report their short positions as of settlement on (1) the 15th of each month, or the preceding business day if the 15th is not a business day, and (2) as of settlement on the last business day of the month.* The reports must be filed by the second business day after the reporting settlement date. FINRA compiles the short interest data and provides it for publication on the 8th business day after the reporting settlement date."]

Can one get a house mortgage without buying a house?

['"I\'ve never heard of a loan product like that. Yes, if they keep the funds in an account, it is no risk to the bank, but they would essentially need to go through the loan process twice for the same loan: when you pick a house, they need to reevaluate everything, along with appraising and approving the house. Even if you did find a bank that would do this for you, there are a few problems with this scheme. You would be paying interest before you have a need for this money, negating the savings you might achieve if the interest rates go up. In addition, your ""balance"" will go down as ""payments"" are deducted from your loan, and when you finally find a home to buy, you might not have enough for the house you want. You\'ll need to borrow more than you need, which will further negate any possible savings. It is impossible to know how fast rates will climb. If I were you, I would stick to saving for your down payment, and just get the best rate you can when you are ready to buy. Another potential idea for you is to lock an interest rate. When you apply for a mortgage, the interest rate is often locked for as much as 60 days, to protect the borrower in the event that the rates go up. You could ask the bank if you can pay a fee to lock the rate even longer. I don\'t know if that is possible or not. And, of course, the fee would eat into your potential savings."', '"As a legal contract, a mortgage is a form of secured debt. In the case of a mortgage, the debt is secured using the property asset as collateral. So ""no"", there is no such thing as a mortgage contract without a property to act as collateral. Is it a good idea? In the current low interest rate environment, people with good income and credit can obtain a creditline from their bank at a rate comparable to current mortgage rates. However, if you wish to setup a credit line for an amount comparable to a mortgage, then you will need to secure it with some form of collateral."', "First, many banks do not keep the loan. Even if they send you a payment notice and process the monthly payment, there's still a good chance the loan itself was packed up and sold to investors. Collateralizing mortgages, in and of itself, is not inherently dangerous. But the loan definitely needs a house behind it. If you found a bank that keeps its loans, it would be a tough sell. You'd be asking them to trust that you've chosen the right number to match up with the house you intend to buy. And then they'd need to have another round of processing to turn this into a loan with normal collateral (i.e. put a lien on the house and tie them together.)", '"Not unless you have something else to put up as collateral. The bank wants a basic assurance that you\'re not going to immediately move the money to the Caymans and disappear. 999 times out of 1000, the collateral for a home mortgage is the home itself (which you wouldn\'t be able to take with you if you decided to disappear), so signing up for a 30 year mortgage on a nonexistent house is probably going to get you laughed out of the bank. It\'s sometimes possible to negotiate something else as collateral; you may, for instance, have a portfolio of securities worth the loan principal, that you can put in escrow for the term of the loan (the securities will stay in your name and make you money, but if you default on the loan the bank goes to the escrow company and takes the portfolio for their own). The bank will consider the risk of value loss on the securities in the portfolio, and may ask for a higher collateral value or only allow a lower loan amount. In all cases, it\'s usually a bad idea to go into long-term personal debt just to get ""cheap money"" that you can use to beat the interest rate with some business plan or investment. If you have a business plan, take that to the bank with an LLC and ask for a business loan. The business itself, if the plan is sound, should become valuable, and the terms of business loans take that into account, allowing for a ""shrinking collateral"" transferring the initial personal risk of the loan to the business."']

What to bear in mind when considering a rental home as an investment?

["Here would be the big two you don't mention: Time - How much of your own time are you prepared to commit to this? Are you going to find tenants, handle calls if something breaks down, and other possible miscellaneous issues that may arise with the property? Are you prepared to spend money on possible renovations and other maintenance on the property that may occur from time to time? Financial costs - You don't mention anything about insurance or taxes, as in property taxes since most municipalities need funds that would come from the owner of the home, that would be a couple of other costs to note in having real estate holdings as if something big happens are you expecting a government bailout automatically? If you chose to use a property management company for dealing with most issues then be aware of how much cash flow could be impacted here. Are you prepared to have an account to properly do the books for your company that will hold the property or would you be doing this as an individual without any corporate structure? Do you have lease agreements printed up or would you need someone to provide these for you?", 'What are the most important facts to keep in mind as I consider this? IMHO, the most important consideration to keep in mind is - do you really want to be in the landlord business, and if so, how much experience do you have in this business?', '"First off, I would label this as speculation, not investing. There are many variables that you don\'t seem to be considering, and putting down such a small amount opens you to a wide variety of risks. Not having an ""emergency fund"" for the rental increases that risk greatly. (I assume that you would not have an emergency fund based upon ""The basic idea is to save up a 20% down payment on a property and take out a mortgage"".) This type of speculation lent a hand in the housing bubble. Is your home paid off? If not you can reduce your personal risk (by owning your home), and have a pretty safe investment in real estate. Mission accomplished. My hope for you would be that you are also putting money in the market. Historically it has performed quite well while always having its share of ""chicken littles""."', '"Started to post this as a comment, but I think it\'s actually a legitimate answer: Running a rental property is neither speculation nor investment, but a business, just as if you were renting cars or tools or anything else. That puts it in an entirely different category. The property may gain or lose value, but you don\'t know which or how much until you\'re ready to terminate the business... so, like your own house, it really isn\'t a liquid asset; it\'s closer to being inventory. Meanwhile, like inventory, you need to ""restock"" it on a fairly regular basis by maintaining it, finding tenants, and so on. And how much it returns depends strongly on how much effort you put into it in terms of selecting the right location and product in the first place, and in how you market yourself against all the other businesses offering near-equivalent product, and how you differentiate the product, and so on. I think approaching it from that angle -- deciding whether you really want to be a business owner or keep all your money in more abstract investments, then deciding what businesses are interesting to you and running the numbers to see what they\'re likely to return as income, THEN making up your mind whether real estate is the winner from that group -- is likely to produce better decisions. Among other things, it helps you remember to focus on ALL the costs of the business. When doing the math, don\'t forget that income from the business is taxed at income rates, not investment rates. And don\'t forget that you\'re making a bet on the future of that neighborhood as well as the future of that house; changes in demographics or housing stock or business climate could all affect what rents you can charge as well as the value of the property, and not necessarily in the same direction. It may absolutely be the right place to put some of your money. It may not. Explore all the possible outcomes before making the bet, and decide whether you\'re willing to do the work needed to influence which ones are more likely."', 'Real estate is not an investment but pure speculation. Rental income may make it look like an investment but if you ask some experienced investor you would be told to stay away from real estate unless it is for your own use. If you believe otherwise then please read on : Another strong reason not to buy real estate right now is the low interest rates. You should be selling real estate when the interest rates are so low not buying it. You buy real estate when the interest rate cycle peaks like you would see in Russia in months to come with 17% central bank rate right now and if it goes up a little more that is when it is time to start looking for a property in Russia. This thread sums it up nicely.']

What does cryptocurrency mean for governments?

["Government's tax citizens and businesses in their currency. Earnings (even earnings in cryptocurrencies) are taxable income."]

Are there any regulations regards end of loan payment procedures?

['There are federal regulations that state that: As a result it can be assumed that when a loan is paid off, notification should be given to the borrower. There is not a penalty since schools are pretty good about recovering their money. It could be due to a simple human error or glitch in the system. I would email them again confirming that your Perkins Loan had been paid in full, just so you have documentation of it.']

If banksimple.com is not a bank, what is it?

["The model itself is fairly common for serving particular niche markets. A few other organizations which operate in similar setups: prepaid card providers such as NetSpend, GreenDot, AccountNow, etc; startups such as SmartyPig, PerkStreet, WePay, and HigherOne. Still, nobody else seems to be providing full-service online banking to mainstream customers the way we plan to. We plan to have much better security than most banks, which isn't hard given the current sorry state of online banking in the US. And having an intermediary who's looking out for your interests can be a good thing. David, my co-founder Josh lays out our launch plans and why we are invite-only in his latest post. In short, we made a decision to build our own call center rather than outsource it, and that limits how quickly we can bring people on.", "Looks more like an idea for a business rather than an actual business -- especially since it hasn't even launched. That said, it does have its merits. What bank actually holds the deposit funds becomes irrelevant, and may actaully change from time to time as they forge better partnerships with different banks. Think of it like a mutual fund -- the individual stocks (if there are stocks) in the fund are less important than the balance of risk vs. income and the leveling of change over the course of time. It offers services banks offer, without fees (at least that is the proposal) with the addition of budgetting capability as well. It does have downsides as well There is an increased level of indirection between you and your money. They propose to simplify the banking business model, but in fact are only hiding it from you. The same complexity that was there before is still there, with the added complexity of their service on top of it. It's just a matter of how much of that complexity you would have to deal with directly. With that in mind, I would reiterate that they are not a business yet -- just a proposed business model. Even the sign up process is a red flag for me. I understand they need to gauge interest in order to forge initial relationships with various banks, but I don't see the need for the 'invitation only' sign up method. It just sounds like a way to increase interest (who doesn't like feeling exclusively invited), and is a bit too 'gimmicky' for my taste. But, like I said, the idea has merit -- I have my reservations, but will reserve full judgement until they are an actual operating business.", '"I don\'t see how this concept takes off. First and foremost, BankSimple is NOT a bank but a tech company masquerading as one. BankSimple leaves industry regulation and treasury management -- the CORE of banking, to outside parties. Call me old fashioned, but I prefer to have as few stops between me and my money as possible. If not for a fear of losing it in a robbery and inability to earn interest, I\'d shove it under a mattress. So why would I want to bank with an intermediary, who admittently doesn\'t understand how the process works? How is that ""looking out for my interests""? And how is your security better than other institutions that offer 128-bit encryption and multiple security questions to test a customer\'s identity? I\'d like to add that not charging overdraft fees and providing lines of credit to help customers out in the event they spend more than they have is nice in concept, but what happens when those same customers do not make deposits to cover their shortfalls? When it comes to money, people will take advantage of any opportunities they have to circumvent the system. Especially if funds are tight."']

How can a credit card company make any money off me? I have a no-fee card and pay my balance on time

['Credit cards have two revenue streams: So yes, the are making money from your daily use of the card.', "They don't make any money off of you personally. They make money off of the merchants per transaction when you use the card. You trigger this fee to the credit card issuer, but it doesn't come out of your pocket. (Or it shouldn't; merchants aren't allowed to pass this fee on to you.) They keep you around because you may at some point become less responsible than you already are, and it would be quite costly to get you back (a couple hundred dollars is the cost of acquiring a new credit card customer). People who are less responsible than you subsidize your free float and your rewards (if any) but the new CARD act makes it more difficult for people to use their cards irresponsibly, so these perks that you enjoy will get less perky with time.", "Of course they make money. They double dip in a lot of instances they make 2 - 3% plus $0.30 per transaction from the merchant and then whatever interest you pay on your card. So let's just say in one day you make stops at Starbucks for a $4 Latte, then at Wendy's for lunch for about $8, then you put about $20 worth of gas in your tank, then you stop at Kroger for some $40 groceries and may you pick up some dinner for about $15. That's 5 transactions at $0.30 which is a $1.50 then at 3% starbucks is $0.12, Wendy's $0.24, gas is $0.60 then kroger $1.20 then dinner $0.45 so the total that they get is $4.11 multiply this by about a million people per day that is about $4.1 million per day that they get. That is a nice penny! just from the merchant so you are making them a lot of money by just using it.", "Maybe they don't make much, but they make some for sure. In addition to what duffbeer703 says, they also have a warm body at the end of the line and will sell your contact info (or at least access to your eyeballs) to marketers. They stuff advertisements into your bill for example. If nothing else, you are brand value for them as they can convince merchants (who get charged monthly) that X billion people carry their card and that merchant would be missing out on sales by not accepting their product. If you have a rewards card that pays you for using it, the merchant has higher corresponding fees.", '"Ever wonder why certain businesses won\'t accept certain credit cards? (The sign above the register saying ""Sorry, we don\'t accept AmericanExpress""). It\'s because they don\'t want to pay that credit card company\'s transaction fees. One of the roles of the credit card company is to facilitate the transaction process between the customer (you) and the store. And now that using credit cards over cash or check is so ingrained in our culture, it creates extra work for the customer to make purchases at an establishment that is cash-only. Credit card companies know this, and so do businesses. So businesses will partner with credit card companies so that customers can use their cards. This way, everything is handled electronically (this can also benefit the business, since there\'s added security as they\'re not dealing with cash directly, and they don\'t have to manually count as much cash later). However a business may only budget a certain amount of their profits they want taken by credit card transactions. So if a company\'s fees are too high (say AmericanExpress, for example) and they are banking on you already having a Visa card, the company isn\'t going to go out of its way to provide the AmericanExpress option for you. If it were free for the business to use a credit card company\'s service at their stores, then they would all just provide the option for every card! So the credit card company making money is all contingent on you spending your money by using their credit card. You use the card, and the store pays the company for the transaction."']

What are the common income tax deductions used by “rich” salaried households?

['"You\'re asking explicitly about $250K+ wage earners. Well, believe it or not, but this is the most discriminated group of people in the US tax code. This is what is called ""the upper middle class"". People who still have to work for a living, but treated as if they\'re rich (I don\'t consider people who must work to keep up their life style as rich). Many of the deductions cannot be taken by them. Lets go over the list Keith made: You mentioned losses - you cannot deduct gambling losses (in excess of gambling income), and you cannot deduct passive (rental real estate, for example) losses. While for rental real estate there\'s a small amount of losses you could deduct, it phases out well below the $250K line (can be deducted against passive income, or when disposed of the property). 529 plans are not deductible (in fact, its a gift subject to the gift tax). Bottom line, being a high earner with wages only means you pay the most tax. You either find a way to become self employed and have a lot of business deductions on your schedule C/1120S, or switch to capital gains. You can marry an unemployed partner, it will make your life slightly easier."', "The $250K and up are not one homogeneous group. The lower end of this group benefits from normal Schedule A itemized deductions, e.g. mortgage interest, property tax, state income tax, and charitable donations. As you mention, 401(k) ($17k employee contribution limit this year), but also things like the dependent care account ($5k limit) and flexible spending account, limited usually up to $2500 in '14. The 529 deposits are limited to the gifting limit, $14K in 2014, but one can gift up to five years' deposits up front. This isn't a tax deduction, but does pull money out of one's estate and lets it grow tax free similar to a Roth IRA. The savings from such accounts is probably in the $15k - $20K range given the 20 or so year lifetime of the account and limited deposits. At the higher end, the folks making the news are those whose income is all considered capital gains. This applies both to hedge fund managers as well as CEOs whose compensation included large blocks of stock. This isn't a tax deduction, but it's how our system works, the taxation of capital gains vs. ordinary income.", "One of the main tax loopholes more readily available to the wealthy in the U.S. is the fact that long-term capital gains are taxed at a much lower rate. Certainly, people making less than $250,000/year can take advantage of this as well, but the fact is that people making, say, $60,000/year likely have a much smaller proportion of their income available to invest in, say, indexed mutual funds or ETFs. You may wish to read Wikipedia's article on capital gains tax in the United States. You can certainly make the argument that the preferential tax rate on capital gains is appropriate, and the Wikipedia article points out a number of these. Nevertheless, this is one of the main mechanisms whereby people with higher wealth in the U.S. typically leverage the tax code to their advantage.", '"From Rich Dad, Poor Dad. 3 Major Things: With rental real estate, in addition to mortgage interest, you also deduct property taxes, and must claim depreciation (cost of house / 27.5 years) Business Expenses. For example, buy a yacht and put it in a charter fleet. Deduct interest on the loan, depreciation of the asset, property taxes, upkeep of the boat. Your ""business"" earns profit from chartering the boat, which if I recall correctly is taxed at a lower rate. You get to go sailing for free. Then there was the concept of subdividing the businesses. If you own a restaurant, create another business to own the property, and the equipment used in the company. Then lease the equipment and rent the land to the restaurant. Now admittedly I thought this was like the Daylight Savings plan of tax avoidance, I mean now aren\'t you essentially having two companies paying half the taxes. I am sure there are well paid CPAs that make the math happen, perhaps using insurance plans.. Perhaps each business funds a ""whole life"" insurance account, and contributes vast amounts into that. Then you take a loan from your insurance account. Loans of course are not income, so not taxed. The third way is to create your own bank. Banks are required to have reserves of 9%. Meaning if I have $100 dollars, the FDIA allows me to loan $1,111. I then charge you 20% interest, or $222/yr. Now how much can I loan? ...well you can see how profitable that is. Sure you pay taxes, but when you print your own money who cares? Most of this is just gleamed from books, and government publications, but that was my general understanding of it. Feel free to correct the finer points."', '"As was stated, households earning over $250k/yr don\'t all get their income one way. Below that threshold, even in the six figure range, most households are in one of two categories; salary/wage/commission workers, and those living off of nest eggs/entitlements (retired, disabled, welfare). Above $250k, though, are a lot of disparate types of incomes: Now, you specifically mentioned wage earners above $250k. Wage earners typically have the same ""tax havens"" that most of us do; the difference is usually that they are better able to make use of them: In other words, there are many ways for a high-end wage earner to live the good life and write a lot of it off."']

How U.S. Depreciation works Explain in brief?

["If a business tool has a limited lifespan, it's value decreases (depreciates) from year to year. The business can capture that loss of value on some things that it couldn't otherwise write off as expenses. A few tools can be either expenses or depreciated, but only one of those can be chosen for that particular object. This is generally not relevant for individual taxpayers, unless you can show that the item is being used for income-producing purposes."]

If I pay someone else's property taxes, can I use it as a deduction on my income tax return?

["According to page 107 of the instructions for schedule A for form 1040 : Include taxes (state, local, or foreign) paid on real estate you own that was not used for business. ... If you want to make a business out of her property and be her agent in the management, you might be able to work with an accountant on this, but it won't be a valid personal deduction.", "To make matters worse, if you pay the property tax your mother in law can't take the deduction either. You may be better off paying rent and having her handle the property correctly, as a rental.", "You cannot deduct. Even if you could, unless you also hold the mortgage, it's unlikely that you would have sufficient deductions to exceed the standard deduction for a married couple."]

Is it possible for credit card companies to check credit score in India?

['Is it possible for the card issuing banks to check my score without my permission? As far as I understand these things, that is exactly the whole purpose of these sorts of credit-rating institutions. The banks and other financial businesses are their customers. They exist to serve those customers. Their relationship, if any, with a consumer is probably secondary to that. When you apply for credit, you give that business any permission needed.']

Free cash flow and capex on morningstar.com

['"Free Cash Flow (FCF) is not a metric/data point which represents any ACTUAL cash flow of a company. FCF is a data point which communicates how much cash a company has after Operating cash requirements and cash expenditures ""required"" to grow and maintain the existing business. FCF can be used to pay dividends, buy back stock, purchase companies, et cetera. None of which are REQUIRED to run the business."']

Filing a corporation tax return online?

["When in doubt, you should always seek the advice of a professional tax preparer or your accountant. (Many agents/accountants will gladly review your tax preparations to ensure you haven't missed something. That's quicker and cheaper than paying them to do it all.) Having said that... This Illinois resource has detailed information about S-corps: Of relevance to your situation:", 'This may not exactly answer your question but, as a small business owner, I would highly recommend having a professional handle your taxes. It is worth the money to have it done correctly rather than doing something wrong and getting audited or worse having penalties assessed and owing more than you thought would be possible. I would recommend this especially if this is how you make your primary income, you can always write it off as a business expense.']

Taxes on transactions of services

["Do Alice and Bob have to figure out the fair market value of their services and report that as income or something? Yes, exactly that. See Topic 420. Note that if the computer program is for Bob's business, Bob might be able to deduct it on his taxes. Similarly, if the remodeling is on Alice's business property, she might be able to deduct it. There might also be other tax advantages in certain circumstances.", "It's called bartering and the IRS has a page titled Four Things to Know About Bartering. The summary is - The bottom line is this is taxable."]

How long do wire transfers take?

["The experience I have with wire transfers is from Australia to the US. These transfers can take up to 5 business dates (i.e. a whole week including the non-business days of the weekend). I would have thought intra-European transfers would be quicker, given how behind most US (regional) banks are in their electronic transfers. However, I don't think you should be worried just yet."]

Do companies that get taken-over have to honour the old gift card/certificate?

["It depends completely on the nature of the takeover. When a business is bought, the new owner takes on the obligations of the prior owner, the debts don't just go away. When a business files for bankruptcy, its debts may get discharged, and gift card holders can easily be the first ones to get nothing back. A case in point was Sharper Image who stopped honoring gift cards even while the doors were open as they filed for bankruptcy.", "I know this is old, but Joe Taxpayer is wrong. When you dissolve a corporation in selling it, all liabilities go with the old owners and the new owners, smartly starting with a new corporation and taxpayer ID, start with a clean slate. The only way this is not true is if the new owners did not change a thing legally and kept everything the same, other than there names, which would be entirely insane if you asked any lawyer in the country. Gift cards are a touchy situation, if not negotiated in the deal, by law the new owners DO NOT have to take them. Yes, it's good PR, but when there's a considerable amount of money out there it could bury the new owners by giving away free stuff."]

Federal taxes for nonresident alien whose only income in 2016 was a 2015 state tax return

['"I believe you have to file a tax return, because state tax refund is considered income effectively connected with US trade or business, and the 1040NR instructions section ""Who Must File"" includes people who were engaged in trade or business in the US and had a gross income. You won\'t end up having to pay any taxes as the income is less than your personal exemption of $4050."']

Cash-basis accounting and barter

["If you don't track the accrued costs involved, then it means that the valuation of the deal will be somewhat arbitrary, but it still can be made by looking at the value of equivalent or similar goods or services. It's rather similar to accounting treatment of (noncash) gifts, for example. You make up a valuation, and as there are obvious tax reasons to make it as low as possible, the valuation should be justifiable or you risk the wrath of IRS. If you sell the same goods or services for cash, then the value of the barter deal is obvious. If this barter is the only time you're handling this particular type of goods, a wholesale price of similar items (either of your items, or the items that you're receiving in barter) could work."]

What is a trade exchange and are they reputable or not?

["I think this is off topic, but here is a stab: So these are cashless. It could be a way to smooth out the harsh reality of capitalism (I overproduced my product, I have more capacity than I can sell) and I can trade those good to other capitalists who similarly poorly planned production or capacity. Therefore the market for a system like is limited to businesses that do not plan well. Business that plan production or capacity to levels they can already sell for cash do not need a private system to offload goods. Alternatives to such a system include: (I don't know how many businesses are really in this over production / over capacity state. If my assumption that it isn't many is wrong, my answer is garbage.) This is a bartering system with a brokerage. I think we have historically found that common currencies create more trade and economic activity because the value of the note in your pocket, which is the same type of note in my pocket, is common and understood. Exchange rates typically slow down trade. (There are many other reasons to have different currency or notes on a global sale, but the exchange certainly is a hurdle to clear.) This brokerage is essentially adding a new currency (in a grand metaphor). And that new currency is only spendable on their brokerage, which is of limited use to society as a whole, assuming that society as a whole isn't a participating member of that brokerage. I can't really think of why this type of exchange is better than the current system we have now. I wouldn't invest in this as a business, or invest in this as a person looking for opportunity."]

Understanding Gift taxes for mortgage downpayment

["You are using interchangeably borrow/loan and gift. They are very different. For the mortgage company, they would prefer that the money from friends and family be a gift. If it is a loan, then you have an obligation to pay it back. If they see money added to your bank accounts in the months just before getting the loan, they will ask for the source of the money. Anything you claim as a gift will be required to be documented by you and the person making the gift. You don't want to lie about it, and have the other person lie about it. They will make you sign documents, if they catch you in a lie you can lose the loan, or be prosecuted for fraud. If the money from friends and family is a loan, the payments for the loan will impact the amount of money you can borrow. From the view of the IRS the gift tax only comes into play if during one calendar year a person makes a gift to somebody else of 14,000 or more. There are two points related to this. It is person-to-person. So if your dad gives you 14K, and your mom gives you 14K, and your dad gives your wife 14k and your mom gives your wife 14K; everything is fine. So two people can give 2 people 56K in one year. Please use separate checks to make it clear to the IRS. If somebody gives a gift above the exclusion limit for the year, they will have to complete IRS form 709. This essentially removes the excess amount from their life time exclusion, in other words from their estate. Nothing to worry about from the IRS. The bank wants to see the documentation. Also you are not a charity, so they can't claim it as a donation. Why do you have 6,000 in cash sitting around. The mortgage company will want an explanation for all large deposits so you better have a good explanation. From the IRS FAQ on Gift Taxes: What can be excluded from gifts? The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts. Number 3 on the list is the one you care about."]

American living abroad and not working for an American company - tax reporting and bank accounts

['"The IRS taxes worldwide income of its citizens and green card holders. Generally, for those Americans genuinely living/working overseas the IRS takes the somewhat reasonable position of being in ""2nd place"" tax-wise. That is, you are expected to pay taxes in the country you are living in, and these taxes can reduce the tax you would have owed in the USA. Unfortunately, all of this has to be documented and tax returns are still required every year. Your European friends may find this quite surprising as I\'ve heard, for instance, that France will not tax you if you go live and work in Germany. A foreign company operating in a foreign country under foreign law is not typically required to give you a W-2, 1099, or any of the forms you are used to. Indeed, you should be paying taxes in the place where you live and work, which is probably somewhat different than the USA. Keep all these records as they may be useful for your USA taxes as well. You are required to total up what you were paid in Euros and convert them to US$. This will go on the income section of a 1040. You should be paying taxes in the EU country where you live. You can also total those up and convert to US$. This may be useful for a foreign tax credit. If you are living in the EU long term, like over 330 days/year or you have your home and family there, then you might qualify for a very large exemption from your income for US tax purposes, called the Foreign Earned Income Exclusion. This is explained in IRS Publication 54. The purpose of this is primarily to avoid double taxation. FBAR is a serious thing. In past years, the FBAR form went to a Financial Crimes unit in Detroit, not the regular IRS address. Also, getting an extension to file taxes does not extend the deadline for the FBAR. Some rich people have paid multi-million dollar fines over FBAR and not paying taxes on foreign accounts. I\'ve heard you can get a $10,000 FBAR penalty for inadvertent, non-willful violations so be sure to send those in and it goes up from there to $250k or half the value of the account, whichever is more. You also need to know about whether you need to do FATCA reporting with your 1040. There are indeed, a lot of obnoxious things you need to know about that came into existence over the years and are still on the law books -- because of the perpetual \'arms race\' between the government and would be cheaters, non-payers and their advisors. http://www.irs.gov/publications/p54/ http://americansabroad.org/"', '"I\'ll add a bit to Paul\'s excellent write up. Foreign Earned Income Exclusion (form 2555): notice the earned there. It doesn\'t exclude capital gains, interest, dividends, and basically everything that is not salary. You pay US taxes on it from the first cent. Foreign tax credit - foreign tax credit (form 1116) doesn\'t reduce your US tax dollar for dollar (even though it may appear that it does from the generic explanations). By using this form you may end up accumulating unused credit while still paying double taxes at the same time. Happened to me. Thank Congress for the logical and reasonable US tax laws. New FATCA form 8938: as opposed to FBAR (that goes to the FinCEN in the Treasury), this one goes to the IRS. it contains very similar info, but the threshold requirements are different. You may have to file FBAR, but not these, or you may have to file both. Being an American citizen, some European banks will refuse to provide services to you. Again, thank Congress for FATCA. It requires foreign banks to enforce US tax regulations on US citizens, and banks that won\'t will get penalized in the US. Many banks refuse to provide services to Americans because of that because what IRS requires is illegal in most countries. Some countries (like UK and some other EU countries) have signed treaties with the US to resolve this, but many haven\'t. Currency conversion - as I commented to Paul, you convert the amounts when you receive them, which may have your fixed EUR salary be converted to different dollar amounts every time. You need to make sure you do it right. Pensions, savings, investments - if you\'re doing these in non-US instruments prepare to be penalized. US taxes foreign investments much more aggressively than domestic. If you\'re investing in indexes/mutual funds, or you\'re a principle in a corporation, or you create a pension account - you\'ll get hit by additional reporting requirements and tax. Tax treaties - the US has tax treaties with many EU countries, and equalization treaties with some. The tax treaties affect the standard tax treatment by the US and some of the ""generic"" info you got here may not apply because of a tax treaty, and some other rules may apply. Equalization treaties work similarly with regards to the Social Security. Bottom line, and I know Paul disagrees with me on this - talk with a US-licensed adviser in the country you\'re going to. It is very important for your tax adviser to know the relevant treaty (and not read it the first time when you call him), and to understand each and every financial instrument in your country. Missing piece of paper in your tax return can cost you thousands of dollars in penalties (not exaggerating, not filing form 3520 triggers a $10000 penalty, even if there\'s no tax) and additional taxes."']

Legal restrictions for EU-foreigners to setup bank account in Czech republic

['"It depends on what exactly do you mean by ""seat of residence"". That term has different meanings (legally) in different countries and different contexts. If you\'re foreigner (even from within the EU), any czech bank will most likely ask you to provide a residence permit. Here are some details: http://www.mvcr.cz/mvcren/article/third-country-nationals-long-term-residence.aspx http://www.czech.cz/en/Business/How-it-works-here/Making-business/How-to-open-a-bank-account-%E2%80%93-Part-1"']

Visiting vacation rental with immediate family

["No, you cannot deduct it. There's no business substance in such a trip, it is your vacation, and as such cannot be claimed as an expense against the rental income. You may be able to deduct the coffee you buy for the meeting with the property manager while there, but there's no way you can justify a 7-10 days vacation with your whole family as an expense to maintain the rental property. Since you will only have less than 2 weeks personal use, you won't need to prorate expenses, so you have that at least.", "If you and your wife are owners, your tickets might be a business expense against the rental income. 'Might' as in the IRS will be happy to audit you, seeing the kids went as well and prorating the expense as say 25% was really business, the rest, family vacation. If this $4000 write off is the make or break for this deal, don't do it."]

What purchases, not counting real estate, will help me increase my cash flow?

["You can increase your monthly cash flow in two ways: It's really that simple. I'd even argue that to a certain extent, decreasing expenses can be more cash-positive than increasing income by the same amount if you're spending post-tax money because increasing income generally increases your taxes. So if you have a chunk of cash and you want to increase your cash flow, you could decrease debt (like Chris suggested) and it would have the same effect on your monthly cash flow. Or you could invest in something that pays a dividend or pays interest. There are many options other than real estate, including dividend-paying stocks or funds, CDs, bonds, etc. To get started you could open an account with any of the major brokerage firms and get suggestions from their financial professionals, usually for free. They'll help you look at the risk/reward aspects of various investments.", "Brownbag your lunch and make coffee at home. If your current lifestyle includes daily takeout lunches and/or barista-made drinks, a rough estimate is you have a negative cash flow of $8-20 per day, $40-100 per week, $2080-5200 per year. If you have daily smoothies, buy a blender. If you have daily lattes buy an espresso maker. I recently got myself a sodastream and it's been worth it. Until you have a six figure portfolio, you aren't going to swing a comparable annual return differential based on asset allocation.", '"Mutual funds can be relatively low risk and a good starting point. Really it depends on you. What are your goals? This is a pretty open ended question. These can all be low risk and provide some return. Note ""Less Knowledge"" is never a good qualifier for an investment. Your money is your business and you are entitled to know what your business is up to."']

Paid credit card bill, but money didn't leave my checking account [duplicate]

["The fact that your credit card has seen the payment is strong evidence that the transaction did in fact take place. But it's not unusual for there to be a delay of one or two business days before transactions show up in your online banking records. Saturday and Sunday are not business days. I bet you will see it on Monday. If it's not there by Tuesday, you could call the bank.", "You probably don't need to call the bank. Today is Sunday, so three days ago was probably Friday (or Thursday depending on how you count the days). Banks normally don't post transactions on weekends - and transactions that do happen on the weekend sometimes don't get posted until Tuesday. I would give it till Tuesday and then call them if you still don't see it show up on your account.", "This is normal for credit cards. As long as you make the credit card company's cutoff time, they will make the funds available on your credit card rather than make you wait for them to actually get the funds from your bank. The amount of time this takes actually can vary significantly from bank to bank. You do want to make sure funds are available in your bank account for them to withdraw when they do take them though. If not, the payment would get returned and can set red flags on your credit card account that take a while to drop off."]

Money Structuring

['"See ""Structuring transactions to evade reporting requirement prohibited."" You absolutely run the risk of the accusation of structuring. One can move money via check, direct transfer, etc, all day long, from account to account, and not have a reporting issue. But, cash deposits have a reporting requirement (by the bank) if $10K or over. Very simple, you deposit $5000 today, and $5000 tomorrow. That\'s structuring, and illegal. Let me offer a pre-emptive ""I don\'t know what frequency of $10000/X deposits triggers this rule. But, like the Supreme Court\'s, ""We have trouble defining porn, but we know it when we see it. And we\'re happy to have these cases brought to us,"" structuring is similarly not 100% definable, else one would shift a bit right."" You did not ask, but your friend runs the risk of gift tax issues, as he\'s not filing the forms to acknowledge once he\'s over $14,000."', "There's a difference between your street level drug dealer sending you sales proceeds of $20,000 in $5,000 increments to avoid sending you $10,000 or $20,000 at once to avoid the scrutiny of a government agency that might not be thrilled with your business venture, and a tire shop paying a wholesaler $5,000 each time funds are available up to the amount owed of $20,000. The former is illegal for a few reasons, and the latter is business as usual.", "Structuring, as noted in another answer, involves breaking up cash transactions to avoid the required reporting limits. There are a couple of important things to note. And, the biggest caveat - there have been many cases of perfectly legitimate transactions that have fallen foul of the reporting requirements. One case springs to mind of a small business that routinely deposited the previous day's receipts as cash, and due to the size of the business, those deposits typically fell in the $9,000-$9,500 range. This business ended up going through a lot of headaches and barely survived. Some don't. A single batch of transactions, if it is only 2 or 3 parts and they are separated by reasonable intervals, is not likely in and of itself to be suspicious. However, any set of such transactions does run the risk of being flagged. In your case, you also run afoul of the Know Your Customer rules, because it's not even you depositing the cash - it's your friend. (Why can your friend not simply write you a check? What is your friend doing with $5k of cash at a time? How do you know he's not generating illegal income and using you to launder it for him?) Were I your bank, you can be very certain I'd be reporting these transactions. Just from this description, this seems questionable to me. IRS seizes millions from law-abiding businesses", 'In the Anti-Money Laundering World ( AML) , structuring consists of the division ( breaking up) of cash transactions, deposits and withdrawals, with the intent to avoid the Currency Transaction Reporting ( CTR) filings. In your case the issue is not structuring but the fact that you have another person ( unknown to the bank) depositing cash , event if it is above the CTR threshold, for you to withdraw later . The entire scenario raises a lot of questions.']

Optimal way to use a credit card to build better credit?

['"First I would like to say, do not pay credit card companies in an attempt to improve your credit rating. In my opinion it\'s not worth the cash and not fair for the consumer. There are many great resources online that give advice on how to improve your credit score. You can even simulate what would happen to your score if you did ""this"". Credit Karma - will give you your TransUnion credit score for free and offers a simulation calculator. If you only have one credit card, I would start off by applying for another simply because $700 is such a small limit and to pay a $30 annual fee seems outrageous. Try applying with the bank where you hold your savings or checking account they are more likely to approve your application since they have a working relationship with you. All in all I would not go out of my way and spend money I would not have spent otherwise just to increase my credit score, to me this practice is counter intuitive. You are allowed a free credit report from each bureau, once annually, you can get this from www.annualcreditreport.com, this won\'t include your credit score but it will let you see what banks see when they run your credit report. In addition you should check it over for any errors or possible identity theft. If there are errors you need to file a claim with the credit agency IMMEDIATELY. (edit from JoeT - with 3 agencies to choose from, you can alternate during the year to pull a different report every 4 months. A couple, every 2.) Here are some resources you can read up on: Improve your FICO Credit Score Top 5 Credit Misconceptions 9 fast fixes for your credit scores"', "Great question. First, my recommendation would be for you to get a card that does not have a yearly fee. There are many credit cards out there that provide cash back on your purchases or points to redeem for gift cards or other items. Be sure to cancel the credit card that you have now so you don't forget about that yearly fee. Canceling will have a temporary impact on your credit score if the credit card is your longest held line of credit. Second, it is recommended not to use more than 20% of all the available credit, staying above that line can affect your credit score. I think that is what you are hearing about running up large balances on your credit card. If you are worried about staying below the 20% line, you can always request a larger line of credit. Just keep paying it off each month though and you will be fine. You already have a history of credit if you have begun paying off your student loans.", '"I answered a similar question, How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score?, in which I show a graph of how utilization impacts your score. In another answer to Should I keep a credit card open to maintain my credit score?, I discuss the makeup of your score. From your own view at Credit Karma, you can see that age of accounts will help your score, so now is the time to get the right cards and stay with them. My background is technology (electrical engineer) and MBA with a concentration in finance. I\'m not a Psychology major. If one is undisciplined, credit can destroy them. If one is disciplined, and pays in full each month, credit is a tool. The quoting of billionaires is a bit disingenuous. I\'ve seen people get turned away at hotels for lack of a credit card. $1000 in cash would not get them into a $200/night room. Yes, a debit card can be used, but the rental car and hotel ""reserve"" a large amount on the card, so if you don\'t have a high balance, you may be out of town and out of luck. I\'ll quote another oft-quoted guru: ""no one gets rich on credit card rewards."" No, but I\'m on track to pay for my 13 year old\'s last semester in college with the rewards from a card that goes right into her account. It will be great to make that withdrawal and not need to take the funds from anywhere else. The card has no fee, and I\'ve not paid them a dime in interest. By the way, with 1-20% utilization ideal, you want your total available credit to be 5X the highest monthly balance you\'d every hit. Last - when you have a choice between 2% cash reward, and the cash discount Kevin manages, take the discount, obviously."', 'In addition to the already good answers: I am assuming you are playing a long game and have no specific need for a high credit score in the next couple of years. This list is just good practice that will raise you score.', '"Or here\'s a better idea: don\'t have a credit card at all. They offer no real benefits and plenty of dangers. Don\'t take my word for it, though: ""I tell every student class I get, high school students, university students, you know, they\'d be better off if they never used credit cards"" - Warren Buffet (Net worth: $44 billion) Before anyone says anything about using credit cards ""wisely"" and getting the rewards points, I can save 15% on many kinds of large purchases ($100+) using cash. You won\'t find a reward system offering that level of incentive. Two recent examples of cash discounts: After I bought my house I needed a lawnmower and a my wife wanted a new vacuum cleaner. Went to Lowe\'s and found the ones we wanted. They were $600 combined. Found the manager, stuck five $100 bills in his hand and said ""this is what I have, and that is what I need."" 16.6% saved. Bought my daugher a bed recently. Queen box spring and mattress were on sale for $300 but it didn\'t come with the rails, which they wanted $50 extra for. Went to the bank and got $320 in cash from the bank, walked in, set it in his hand and said, ""I need the bed box spring and rails, tax included."" He replied, ""Sorry man, I can\'t. I\'m already taking a loss on..."" Then he stopped mid sentence, looked down at the cash again and said ""Hold on. Let me ask my manager."" Manager walks over, guy explains what I said, manager looks at the cash and says ""Make it happen"" 14.3 % saved. As for purchasing a home, it is a myth that you need a credit score to obtain a mortgage for a home. Lending institutions can do manual underwriting instead of just relying on your credit score. It is a little tougher to do and banks usually have stricter requirements, but based on the information the OP has given in this and other questions, I think he can easily meet them."', "If you have self control and a good handle on your finances, which it sounds like - I suggest the following: Note: #3 is important - if you're not able to pay it off each month don't do this because it will cost you a lot in interest. Make sure to check how interest is calculated in case you don't pay it off in full or miss the due date for a month. If you can do this you'll earn some good benefits from the card using money that you're going to spend anyway, as well as build your credit profile. Regarding annual fees -", 'Most business credit cards do not report to the personal credit report unless the person pays the card late. Given that fact, any debt carried on these cards does not hurt the credit score if it is not reported. You can carry credit card debt on these cards without hurting your credit score. Just apply for business credit cards now to start building this segment of your credit.', '']

Is it legal for a vendor to reuse credit details from a previous transaction

['It is very much legal and in fact depending on the fine print of the purchase you make, you have now established a business relationship among which gives the business the right to hold on to your information (unless privacy policy states otherwise) and reuse it under certain circumstances (such as auto shipments) and when they called and asked you if you wanted it and you said OK, you acknowledged authorization. All legal even if pushy and less than pretty.']

car loan but 2 people on title

["Yes, but then either of you will need the other's permission to sell the car. I strongly recommend you get an agreement on that point, in writing, and possibly reviewed by a lawyer, before entering into this kind of relationship. (See past discussions of car titles and loan cosigners for some examples of how and why this can go wrong.) When doung business with friends, treating it as a serious business transaction is the best way to avoid ruining the friendship."]

How is income tax calculated in relation to selling used items?

['If the items you sold are items you previously bought for a higher price, the money you get selling them is not income, as you are taking a loss. However, you cannot deduct such losses. If you sell anything for more than what you paid for, the difference is a gain and is taxable. See this IRS web site for the explanation: https://www.irs.gov/businesses/small-businesses-self-employed/tax-tips-for-online-auction-sellers', "If I sell it for $50 can I write off the $50 loss. Only if you can establish that it is a normal part of your business and that you did not get $50 worth of use out of it. That's the technical, legal argument. As a practical matter, it's unlikely that they'll ding you for selling something after using it, as they won't know. If they did catch you, you would be in trouble. You can't deduct loss due to personal use. The larger problem is that if you sell one TV for a $50 loss, they aren't going to believe that you are in the business of selling TVs. If you sell a larger amount for a loss, then they still are unlikely to believe that you are in business. If you sell a large amount for an overall gain, they are unlikely to notice that you took a loss on one TV. They could only notice that if they were already auditing you, as that wouldn't be visible in your tax forms.", "Yes. This income would be reported on schedule SE. Normally, you will not owe any tax if the amount is less than $400. Practically, $100 in a garage sale is not why the IRS created the form SE. I wouldn't lose sleep over keeping track of small cash sales over the course of a year. However, if you have the information I'm not going to tell you not to report it."]

What's the most conservative split of financial assets for my portfolio in today's market?

["Before investing, absolutely follow the advice in mbhunter's answer. There is no safe investment (unless you count your mattress, and even there you could find moths, theives, or simple inflation taking a chunk out of your change). There is only maximizing your reward for a given level of risk - and there is always risk. This question should be enshrined somewhere on the Q&A site for its comprehensive list of sources for information on asset allocation. The tag is also going to have tons of good information for you. To answer your question on what slice of the pie is devoted to what, you can check out some common portfolios given by U. S. experts for U. S. investors - these should be convertible into Australian funds. Another portfolio that is, like all those above, loosely based on Modern Portfolio Theory for maximizing reward for a given level of risk is the Gone Fishin' Portfolio. A common denominator amongst these portfolios is that they emphasize index funds over mutual funds for their long-term performance and preference lazy management (yearly rebalancing is a common suggestion as the maximum level of involvement) over active management. You can see more Lazy Portfolios.", "This is a somewhat complicated question because it really depends on your personal situation. For example, the following parameters might impact your optimal asset allocation: If you need the money before 3 years, I would suggest keeping almost all of it in cash, CDs, Treasuries, and ultra safe short-term corporate bonds. If however, you have a longer time horizon (and since you're in your 30s you would ideally have decades) you should diversify by investing in many different asset classes. This includes Australian equity, international equity, foreign and domestic debt, commodities, and real estate. Since you have such a long time horizon market timing is not that important.", "You don't say your level of consumer debt. You don't say how much of an emergency fund you have. If you have debt, pay it off before you invest. If you don't have an emergency fund (X months' expenses, pick your own X) get that before investing. If you have neither, get a small emergency fund, and then throw as much as you can to getting rid of debt. Beyond that, look for prudent investments. They're not the same as conservative investments. To know what's prudent, learn about the ones you listed and what determines their prices. Learn how or why they go up or down in value.", '"If you can afford the time and are looking for more deep, and fun, investment tips, check out http://gurufocus.com. Great for more fundamental analysis of ""Intelligent Investor"" type Benjamin Graham-style businesses. No use scatter-shooting the stock exchange hoping to find good value businesses. Even blue-chips have an increasingly uncertain future (except IMHO certain world dominators like KO, WMT, XO and MCD)."', "The safest place to put money is a mixture of cash, local municipal bond funds with average durations under two years and US Treasury bond funds with short durations. Examples of good short term US municipal funds: I'm not an active investor in Australian securities, so I won't recommend anything specific. Because rates are so low right now, you want a short duration (ie. funds where the average bond matures in < 2 years) fund to protect against increased rates. The problem with safety is that you won't make any money. If your goal to grow the value of your investment while minimizing risk, you need to look at equities. The portfolios posted by justkt are a great place to start."]

How do rich people guarantee the safety of their money, when savings exceed the FDIC limit?

["They might not have to open accounts at 12 bank because the coverage does allow multiple accounts at one institution if the accounts are joint accounts. It also treats retirement accounts a separate account. The bigger issue is that most millionaires don't have all their money siting in the bank. They invest in stocks, bonds, government bonds, international funds, and their own companies. Most of these carry risk, but they are diversified. They also can afford advisers to help them manage and protect their assets.", '"Rich people use ""depositor"" banks the same way the rest of us use banks; to keep a relatively small store of wealth for monthly expenses and a savings account for a rainy day. The bulk of a wealthy person\'s money is in investments. Money sitting in a bank account is not making you more money, and in fact as Kaushik correctly points out, would be losing value to inflation. Now, all investments have risk; that\'s why interest exists. If, in some alternate universe, charging interest were illegal across the board, nobody would loan money, because there\'s nothing to be gained and a lot to lose. You have to make it worth my while for me to want to loan you my money, because sure as shootin\' you\'re going to use my loan to make yourself wealthier. A wealthy person will choose a set of investments that represent an overall level of risk that he is comfortable with, much like you or I would do the same with our retirement funds. Early in life, we\'re willing to take a lot of risk, because there\'s a lot of money to be made and time to recover from any losses. Closer to retirement, we\'re much more risk-averse, because if the market takes a sudden downturn, we lose a significant portion of our nest egg with little hope of regaining it before we have to start cashing out. The very wealthy have similar variances in risk, with the significant difference that they are typically already drawing a living from their investments. As such, they already have some risk aversion, but at the same time they need good returns, and so they must pay more attention to this balancing act between risk and return. Managing their investments in effect becomes their new job, once they don\'t have to work for anyone else anymore. The money does the ""real work"", and they make the executive decisions about where best to put it. The tools they use to make these decisions are the same ones we have; they watch market trends to identify stages of the economic cycle that predicate large movements of money to or from ""safe havens"" like gold and T-debt, they diversify their investments to shield the bulk of their wealth from a sudden localized loss, they hire investment managers to have a second pair of eyes and additional expertise in navigating the market (you or I can do much the same thing by buying shares in managed investment funds, or simply consulting a broker; the difference is that the wealthy get a more personal touch). So what\'s the difference between the very wealthy and the rest of us? Well first is simple scale. When a person with a net worth in the hundreds of millions makes a phone call or personal visit to the financial institutions handling their money, there\'s a lot of money on the line in making sure that person is well looked-after. If we get screwed over at the teller window and decide to close our acocunts, the teller can often give us our entire account balance in cash without batting an eyelid. Our multimillionaire is at the lower end of being singlehandedly able to alter his banks\' profit/loss statements by his decisions, and so his bank will fight to keep his business. Second is the level of control. The very wealthy, the upper 1%, have more or less direct ownership and control over many of the major means of production in this country; the factories, mines, timber farms, software houses, power plants, recording studios, etc that generate things of value, and therefore new wealth. While the average Joe can buy shares in these things through the open market, their investment is typically a drop in the bucket, and their voice in company decisions equally small. Our decision, therefore, is largely to invest or not to invest. The upper 1%, on the other hand, have controlling interests in their investments, often majority holdings that allow them far more control over the businesses they invest in, who\'s running them and what they do."', "I found out there is something called CDARS that allows a person to open a multi-million dollar certificate of deposit account with a single financial institution, who provides FDIC coverage for the entire account. This financial institution spreads the person's money across multiple banks, so that each bank holds less than $250K and can provide the standard FDIC coverage. The account holder doesn't have to worry about any of those details as the main financial institution handles everything. From the account holder's perspective, he/she just has a single account with the main financial institution.", "Most people who have over $250,000 in liquid cash savings would not want to start putting their money into regular savings accounts in different banks, especially with interest rates as ridiculously low as they are now in 2014-15. People with money will want to diversify their investments in ways that will potentially earn them more money, and they can also afford to seek the advice of financial planners who can help them do this wisely. Even if you decide to put $250,000 into various accounts at different banks, I wouldn't necessarily trust that the FDIC will be able to help you recover your money in the event that your banks go under. The amount of money available to the FDIC to cover such losses pales in comparison to the actual amount of money that Americans have in their bank accounts.", 'Even assuming hypothetically that you are able to split money in different bank accounts to get full coverage and all your accounts are in top ranking financial institutions in USA, you can not rely on FDIC if all or most of those banks go broke. Because FDIC just has a meagre 25 billion dollars to cover all bank accounts in the USA. And you know the amount of bank deposits in USA run in at least a trillion of dollars. US Deposits & FDIC Insurance figures', 'The FDIC has been pretty good at recovery lost money from failed banks. The problem is the temporary loss from immediate needs. The best thing for anyone to do is diversify in investments and banks with adequate covered insurance for all accounts. Immediate access to available cash is always a priority that should be governed by the money manager in this case yourself.', 'With a lot excess cash you eventually have two goals: Since interest on cash bank deposits does not exceed inflation and you have currency risk, you may want to get into other asset classes. Options that might be, but not limited to are:']

Tax implications of having some self-employment income?

['"You would put your earnings (and expenses, don\'t forget) on Schedule C, and then do a Schedule SE for self-employment tax. http://www.irs.gov/businesses/small/article/0,,id=98846,00.html 1040ES isn\'t used to compute taxes, it\'s used to pay taxes. Generally you are supposed to pay taxes as you go, rather than when you file. There are exceptions where you won\'t be penalized for paying when you file, ""most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller"" from http://www.irs.gov/taxtopics/tc306.html i.e. there\'s a safe harbor as long as you pay as much as you owed the year before. If you owe a lot at the end of the year a second time in a row, then you get penalized."', "Havoc P's answer is good (+1). Also don't forget the other aspects of business income: state filing fees, county/city filing fees, business licenses, etc. Are there any taxes you have to collect from your customers? If you expect to make more this year, then you should make estimated quarterly tax payments. The first one for 2011 is due around the same time as your federal income tax filing."]

Can an International student of F1 VISA accept money in her US bank account on behalf of someone else?

['There might be a problem. Some reporting paperwork will have to be done for the IRS, obviously, but technically it will be business income zeroed out by business expense. Withholding requirements will shift to your friend, which is a mess. Talk to a licensed tax adviser (EA/CPA) about these. But the immigration may consider this arrangement as employment, which is in violation of the visa conditions. You need to talk to an immigration attorney.']

Found Mistake on 2013 1120S Form

['"I don\'t know if it\'s common or necessary to include capital stock as a liability? Yes, if you look at the title of the nonasset part of the balance sheet it actually is titled ""Liabilities and Shareholders\' Equity"". Your capital stock is a component of Equity. This sounds like it was reported in a reasonable manner. ""$2,582 listed under Loans from Shareholders (Line 19)."" Did you have a basis issue with your distributions? That is did you take shareholder distributions more than your adjusted basis that you have been taxed on? I have seen the practice of considering distributions in excess of basis as short term loans to prevent the additional taxation of the excess distribution. Be careful when you adjust this entry, your balance sheet had to roll from one year to the next. You must have a reasonable transaction to substantiate the removal of the shareholder loan."']

Why Are Credit Card Rates Increasing / Credit Limits Falling?

["Because people are going deeper into debt and filing for bankruptcy more often, there is more risk on behalf of the credit company. Therefore, they limit their risk by lower limits and increasing interest. For every person that goes bankrupt, there might be 10 that pay that new higher interest rate, thereby netting a profit even though they lost out completely on the one customer. The recent legislation limited how and under what circumstance rate are adjusted and raised, but not forbidden. As for the fact that these banks took tax money under the idea (we all thought) I see two points of view. We never should have had the credit we did, so they are correcting and you (like me and millions of others) are suffering for their prior mistakes. It is an honest attempt to correct the system for long term stability even if we suffer in the short term. We gave them tax money, they need to not screw us over. In response to the still frozen credit markets I would suggest penalty taxes to companies that do not lend. Penalties to companies that do not modify mortgages. The second you take government money is the last second a you are entitled to a profit of anything. Furthermore, we the people bought you and we the people get to decide your salary. The bottom line is there is truth in both statements. Things are totally screwed up right now because we ALL made mistakes in the past trying to get a bigger profit or own a bigger house. There are those among us who didn't make a mistake, and those among us who made nothing but mistakes. As a society, we have to pay the piper either way. The best thing you can do now is pay down your debts, live simply and spend your money wisely.", "Of course your situation is very hurtful at a personal level, and I sympathize. I just don't get your point about being driven further into debt? It would seem that with a lower credit score you are prevented from taking on more debt. That can absolutely be hurtful especially to someone who runs a business that relies on short term credit. As for why they do this, they do it to reduce their risk - they don't want to lend more money, they are afraid that you will lose your job and default. Of course it is not as personal as I am writing it, not for you (they don't target you personally - they target your credit profile) and not for them (it is a matter of how the market views the debt and how much they can trade on such debt, not what they want to do personally). As for the TARP bailouts not releasing enough credit - this is reality. Goverment always thinks it can influence the situation more than it actually can. In order to unfreeze credit there needs to be a growing economy that makes the risk look acceptable. No amount of Goverment nudging will really change that more than marginally. By the way, legislation like this (forcing credit card companies to not raise their rates) can lead to credit restrictions. By artifically forcing the rates down the risk has to be ballanced somewhere - so it will be ballanced by lowering credit lines or by other means. Like any price control, if you restrict the price, it causes shortages. Intrest rates are the price of credit."]

Does dividend on 401K have any effect on gains

["Adjusting for a market change from day to day, the dividend should have no impact on you. Your X shares time $Y should be nearly identical right after that dividend hits the account. And within the 401(k) or IRA for that matter, the accounting doesn't matter most of the time. Outside a retirement account, you need to pay tax on the dividend, and add the newly purchased shares' cost to your cost basis.", 'It appears from your description that the 401k account has the automatic dividend reinvestment policy, and that the end result is exactly the same as the external account with the same policy. I.e.: no difference, the dividend affected the 401k account in exactly the same way it affected the external account. The only thing is that for external account you can take the dividend distribution, while for 401k you cannot - it is reinvested automatically. Were you expecting something else?']

Why an inner suburbs small apartment considered a risky investment

["The banks see small apartments as a higher risk because usually very small apartments are harder to sell, especially during a falling market when there is an oversupply of these apartments. The price of small apartments will also fall a lot quicker in a falling market. Regarding yield vs capital growth - the emphasis here is manly on high yielding properties in small country towns with small populations. How many properties can you buy with cash? Properties with good growth will enable you to build equity quicker and enable you to build a larger portfolio. In my opinion you need a combination of good yield and reasonable growth, because without yield you cannot replace your earned income with passive income, but without growth you can't expand your portfolio. So a combination of good yield with reasonable growth will give the best outcome."]

Might it make sense not to look into debt that is in collections?

['"It\'s your business to pay what you owe but it\'s not your business to determine what you owe. The ""Fair Debt Collections Practices act"" FDCPA proscribes certain steps creditors must go through to contact you. You appear to not have received any active contact or demand, but you can still cite the FDCPA to make it their problem. Write to the creditor\'s address (I assume its the hospital, the OP isn\'t clear), use USPS Certified Mail Return Receipt Requested, asking them to validate that you owe this debt by mail in 5 days, as is your right under the FDCPA. If they get back to you and you agree (or its reasonably plausible) you do owe it, pay it especially if it\'s on the order of $100. At least you will know it is settled at the source. Cross reference to your insurance claims to be sure its not double billed or a miscredited copay, but you may see many legit separate charges from one ER visit (hospital, doctor, anesthesiologist, etc) and it would not be the first time a medical billing system crapped the bed. If you don\'t hear anything after a few weeks, use the credit report protest process (or write to them, cc: the Federal Trade Commission) contesting the validity of this report. The creditor did not respond to your FDCPA request for validation (copy of the Return Receipt); and you otherwise believe you are current with the hospital. Per the Fair Credit Reporting act, they must investigate. Fight bureaucratic fire with fire: conduct all business by mail, and make liberal use of certified mail return receipts. Its a $6 way to telegraph you know that they have specific federal law timeliness requirements; and you have a federal timestamp signed by someone in their organization."']

What do I need to do to form an LLC?

["I know that there are a lot service on the internet helping to form an LLC online with a fee around $49. Is it neccessarry to pay them to have an LLC or I can do that myself? No, you can do it yourself. The $49 is for your convenience, but there's nothing they can do that you wouldn't be able to do on your own. What I need to know and what I need to do before forming an LLC? You need to know that LLC is a legal structure that is designed to provide legal protections. As such, it is prudent to talk to a legal adviser, i.e.: a Virginia-licensed attorney. Is it possible if I hire some employees who living in India? Is the salary for my employees a expense? Do I need to claim this expense? This, I guess, is entirely unrelated to your questions about LLC. Yes, it is possible. The salary you pay your employees is your expense. You need to claim it, otherwise you'd be inflating your earnings which in certain circumstances may constitute fraud. What I need to do to protect my company? For physical protection, you'd probably hire a security guard. If you're talking about legal protections, then again - talk to a lawyer. What can I do to reduce taxes? Vote for a politician that promises to reduce taxes. Most of them never deliver though. Otherwise you can do what everyone else is doing - tax planning. That is - plan ahead your expenses, time your invoices and utilize tax deferral programs etc. Talk to your tax adviser, who should be a EA or a CPA licensed in Virginia. What I need to know after forming an LLC? You'll need to learn what are the filing requirements in your State (annual reports, tax reports, business taxes, sales taxes, payroll taxes, etc). Most are the same for same proprietors and LLCs, so you probably will not be adding to much extra red-tape. Your attorney and tax adviser will help you with this, but you can also research yourself on the Virginia department of corporations/State department (whichever deals with LLCs).", '"You can file an LLC yourself in most states, although it might be helpful to use a service if you\'re not sure what to do to ensure it is correct. I filed my LLC here in Colorado online with the Secretary of State\'s office, which provided the fill-in-the-blank forms and made it easy. In the U.S., taxation of an LLC is ""pass-through"", meaning the LLC itself does not have any tax liability. Taxes are based on what you take out of the LLC as distributions to yourself, so you pay personal income tax on that. There are many good books on how to form and then operate an LLC, and I personally like NoLo (link to their web site) because they cater to novices. As for hiring people in India, I can\'t speak to that, so hopefully someone else can answer that specific topic. As for what you need to know about how to run it, I\'ll refer back to the NoLo books and web site."']

How should we organize our finances to effectively plan and prepare for an retirement in next 10 years?

["Wow! First, congratulations! You are both making great money. You should be able to reach your goals. Are we on the right track ? Are we doing any mistakes which we could have avoided ? Please advice if there is something that we should focus more into ! I would prioritize as follows: Get on the same page. My first red flag is that you are listing your assets separately. You and your wife own property together and are raising your daughter together. The first thing is to both be on the same page with your combined income and assets. This is critical. Set specific goals for the future. Dreaming and big-picture life planning will be the foundation for building a detailed plan for reaching your goals. You will see more progress with more sacrifice. If you both are not equally excited about the goals, you will not both be equally willing to sacrifice lifestyle now. You have the income now to be able to set yourselves up to do whatever you want in 10 years, if you can agree on what you want. Hire a financial planner you trust. Interview people, ask someone who is where you want to be in 10 years. You need someone with experience that can guide you through these questions and understands how to manage your income stream. Start saving for retirement in tax-advantaged accounts. This should be as much as 10%-15% of your income combined, so $30k-$45k per year. You need to start diversifying your investments. Real estate is great, but I would never recommend it as this large a percentage of net worth. Start saving for your child's education. Hard to say what you need here, since I don't know your goals. A financial planner should assist you with this. Get rid of your debt. Out of your $2.1M of rental real estate and land, you have $1.4M of debt. It will be difficult to start a business with that much additional debt. It will also put stress on your retirement that you don't need. You are taking on lots of risk here. I would sell all but maybe one of the properties and let it cash flow. This will free up cash to start investing for retirement or future business too. Buy more rental in the future with cash only. You have plenty of income to do it this way, and you will be setting yourself up for a great future. At this point you can continue to pile funds into any/all your investments, with the goal of using the funds to start a business or to live on. If all your investments are tied up in real estate, you wont have anything to draw on if needed for a business opportunity. You need to weigh this out in your goal and planning. What should we do to prepare for a comfortable retirement and safety You cannot plan for or see all scenarios. However, good planning will give you more options and more choices. Investing driven by fear will set you up for failure. Spend less than you make. Be patient. Be generous. Cheers!", "The biggest issue is your lack of diversification. Your real estate investments have performed quite well so far, but you have also likely enjoyed a period of unprecedented growth that is not sustainable. In the long term, stocks have always outperformed real estate investments, which tend to track more closely to the inflation rate. You need more balance for when when the real estate market cools off. You don't mention tax-deferred retirement savings accounts. You should prioritize your attention to these to keep your income tax low. Consider selling one of your investment properties if you can't adequately fund the 401k."]

If I have some old gold jewellery, is it worth it to sell it for its melt value?

["Get your jewelery appraised. (Don't let whoever does the appraisal be the same person whom you would sell it to.) Logically jewelery must be worthy more than the raw gold that makes it up because somebody took the time to design patterns and do specialty craft to the metal.", "I have a buddy that used to run one of those companies that buys gold like the ones you see on TV. Here's the deal... 1) If the jewelry isn't total junk, get it appraised. Making raw materials into jewelry obviously increases the value since you can't buy jewelry for the price of raw gold. In many cases it will be worth more as jewelry, but not always. Depends on the piece. 2) Those companies generally rely on the fact that people selling jewelry to a gold dealer are in a hurry to get cash and are very negotiable on what they will take for it. Depending on how predatory they are, you will probably get between 50 and 75% of the market rate. They make a living on the spread and people's need for quick cash. They usually resell it immediately to a 3rd party that actually melts it down and resells it. So the short answer to your question is no, you won't get close to market value with these companies. You would do better if you didn't have to go through the middle man, but then those final buyers aren't generally the ones who have set up shop to deal with the general public.", '"I just came across an article from the CBC on this subject: Here\'s one tip from the article, which echoes what others have said: ""The agency [Better Business Bureau in B.C.] suggests getting two or three appraisals from a jeweller or jewelry store before deciding to sell."" See the full article for the rest of the tips."', 'Avoid gold brokers who do business through the mail. Video Full Article']

Why is there some latency between the time a check deposit was processed and when one can withdraw the money on Fidelity CMAs?

['Every bank and credit union in the US has a Deposit Agreement and Disclosures document, Bank of America is no different. Our general policy is to make funds from your cash and check deposits available to you no later than the first business day after the day of your deposit. However, in some cases we place a hold on funds that you deposit by check. A hold results in a delay in the availability of these funds. that sounds great but ... For determining the availability of your deposits, every day is a business day, except Saturdays, Sundays, and federal holidays. If you make a deposit on a business day that we are open at one of our financial centers before 2:00 p.m. local time, or at one of our ATMs before 5:00 p.m. local time in the state where we maintain your account, we consider that day to be the day of your deposit. However, if you make a deposit after such times, or on a day when we are not open or that is not a business day, we consider that the deposit was made on the next business day we are open. Some locations have different cutoff times. so if you deposit a check on Friday afternoon, the funds are generally available on Tuesday. but not always... In some cases, we will not make all of the funds that you deposit by check available to you by the first business day after the day of your deposit. Depending on the type of check that you deposit, funds may not be available until the second business day after the day of your deposit. The first $200 of your deposits, however, may be available no later than the first business day after the day of your deposit. If we are not going to make all of the funds from your deposit available by the first business day after the day of your deposit, we generally notify you at the time you make your deposit. We also tell you when the funds will be available. Ok what happens when the funds are available... In many cases, we make funds from your deposited checks available to you sooner than we are able to collect the checks. This means that, from time to time, a deposited check may be returned unpaid after we made the funds available to you. Please keep in mind that even though we make funds from a deposited check available to you and you withdraw the funds, you are still responsible for problems with the deposit. If a check you deposited is returned to us unpaid for any reason, you will have to repay us and we may charge your account for the amount of the check, even if doing so overdraws your account. Fidelity has a similar document: Each check deposited is promptly credited to your account. However, the money may not be available until up to six business days later, and we may decline to honor any debit that is applied against the money before the deposited check has cleared. If a deposited check does not clear, the deposit will be removed from your account, and you are responsible for returning any interest you received on it. I would think that the longer holding period for Fidelity is due to the fact that they want to wait long enough to make sure that the number of times they have to undo investments due to the funds not clearing is nearly zero.']

I'm getting gouged on prices for medical services when using my HSA plan. How to be billed fairly?

["The big difference for me under the High deductible plan has been that instead of paying the co-pay, now I am now responsible for the negotiated rate until I reach the deductible limit. The HSA is only a way to funnel medical payments through a tax free account the insurance company and the doctor don't care about the HSA. If we go out-of-network, then I am responsible for the full rate, but they only count the negotiated rate as a credit against the out of pocket/deductible. This big difference makes it very important to pick a doctor in-network. For your example: I would have paid $50 under the PPO, but $200 under the high deducible plan. If I go out-of-network I would have to pay whatever the doctor want me to pay, but the insurance company would only credit me $200 against my deductible. I can pull the extra $350 from the HSA. It is hard to get good pricing information from some doctors, but the price difference for me has been so large that in-network is the only way to go. For prescriptions the high deductible plan has been worse, because we pay the full price with no discounts for the medicine, until we reach the plan deductible. That makes the cost of the prescriptions as much as 10x's more expensive. In fact the annual cost of our prescriptions all but guarantees that we hit the deductible each year.", '"I had an HSA for two or three years. I found very routinely that my insurance company had negotiated rates with in-network providers. So as I never hit the deductible, I always had to pay 100% of the negotiated rate, but it was still much less than the providers general rate. Sometimes dramatically so. Like I had some blood and urine tests done and the general rate was $450 but the negotiated rate was only $40. I had laser eye surgery and the general rate was something like $1500 but the negotiated rate was more like $500. Et cetera. Other times it was the same or trivially different, like routine office visits it made no difference. I found that I could call the insurance company and ask for the negotiated rate and they would tell me. When I asked the doctor or the hospital, they either couldn\'t tell me or they wouldn\'t. It\'s possible that the doctor\'s office doesn\'t really know what rates they\'ve agreed to, they might have just signed some contract with the insurance company that says, yes, we\'ll accept whatever you give us. But either way, I had to go to the insurance company to find out. You\'d think they\'d just publish the list on a web site or something. After all, it\'s to the insurance company\'s advantage if you go to the cheapest provider. With a ""regular"" non-HSA plan, they\'re share of the total is less. Even with an HSA plan if you go to a cheaper provider you are less likely to hit the deductible. Yes, medical care in the U.S. is rather bizarre in that providers routinely expect you to commit to paying for their services before they will tell you the price. Can you imagine any other industry working this way? Can you imagine buying a car and the dealer saying, ""I have no idea what this car costs. If you like it, great, take it and drive it home, and in a few weeks we\'ll send you a bill. And of course whatever amount we put on that bill you are legally obligated to pay, but we refuse to tell you what that amount will be."" The American Medical Association used to have a policy that they considered it ""unethical"" for doctors to tell patients the price of treatment in advance. I don\'t know if they still do."', "First, as noted in the comments, you need to pay attention to your network providers. If you are unable to pay exorbitant prices out of pocket, then find an in-network medical provider. if you are unhappy with the in-network provider list (e.g. too distant or not specialists), then discuss switching to another plan or insurer with your employer or broker. Second, many providers will have out of pocket or uninsured price lists, often seen in outdated formats or disused binders. Since you have asked for price lists and not been provided one, I would pursue it with the practice manager (or equivalent, or else a doctor) and ask if they have one. It's possible that the clinic has an out of pocket price list but the front line staff is unaware of it and was never trained on it. Third, if you efforts to secure a price list fail, and you are especially committed to this specific provider, then I would consider engaging in a friendly by direct negotiation with the practice manager or other responsible person. Person they will be amenable to creating a list of prices (if you are particularly proactive and aggressive, you could offer to find out of pocket price lists from other clinics nearby). You could also flat out ask them to charge you a certain fee for office visits (if you do this, try to get some sort of offer or agreed price list in writing). Most medical practices are uncomfortable asking patients for money, so that may mean flat refusal to negotiate but it may also mean surprising willingness to work with you. This route is highly unpredictable before you go down it, and it's dependent on all sorts of things like the ownership structure, business model, and the personalities of the key people there. The easiest answer is to switch clinics. This one sounds very unfriendly to HSA patients."]

18 year old making $60k a year; how should I invest? Traditional or Roth IRA?

['"1) Usually, the choice between Traditional vs. Roth is whether you believe that your tax rate will be higher or lower in the future than it is now. Your income is probably in the 25% bracket now. It\'s hard to say whether that should be considered ""high"" or ""low"". Some people advocate Roth only for 15% bracket; but your income would probably go into higher brackets in the future, so Roth may be preferable from this point of view. Roth IRA also has another advantage that the principal of contributions can be taken out at any time without tax or penalty, so it can serve as an emergency fund just as well as money in taxable accounts. Given that you may not have a lot of money saved up right now, this is useful. 2) In a sense, it\'s nice to have a mix of Traditional and Roth when you withdraw to hedge against uncertainty in future tax rates and have the option of choosing whichever one is advantageous to withdraw when you need to withdraw. That said, you will likely have many years of access to a 401k and high income in your future working years, in which you can contribute to a Traditional 401k (or if no access to 401k, then Traditional IRA), so a mix will almost certainly happen even if you go all Roth IRA now. 3) I think that depends on you, whether you are a hands-on or hands-off kind of investor."', 'With this level of income, you might consider a Solo 401(k). It would allow you a much higher level of contributions and is more appropriate for your savings than the limited IRA deposits. It also offers a considerable number of options not available for IRAs. A loan for example.', '"In asnwer to your questions: As @joetaxpayer said, you really should look into a Solo 401(k). In 2017, this allows you to contribute up to $18k/year and your employer (the LLC) to contribute more, up to $54k/year total (subject to IRS rules). 401(k) usually have ROTH and traditional sides, just like IRA. I believe the employer-contributed funds also see less tax burden for both you and your LLC that if that same money had become salary (payroll taxes, etc.). You might start at irs.gov/retirement-plans/one-participant-401k-plans and go from there. ROTH vs. pre-tax: You can mix and match within years and between years. Figure out what income you want to have when you retire. Any year you expect to pay lower taxes (low income, kids, deductions, etc.), make ROTH contributions. Any year you expect high taxes (bonus, high wage, taxable capital gains, etc.), make pre-tax payments. I have had a uniformly bad experience with target date funds across multiple 401(k) plans from multiple plan adminstrators. They just don\'t perform well (a common problem with almost any actively managed fund). You probably don\'t want to deal with individual stocks in your retirement accounts, so rather pick passively managed index funds that track various markets segments you care about and just sit on them. For example, your high-risk money might be in fast-growing but volatile industries (e.g. tech, aerospace, medical), your medium-risk money might go in ""total market"" or S&P 500 index funds, and your low-risk money might go in treasury notes and bonds. The breakdown is up to you, but as an 18 year old you have a ~50 year horizon and so can afford to wait out anything short of another Great Depression (and maybe even that). So you\'d want generally you want more or your money in the high-risk high-return category, rebalancing to lower risk investments as you age. Diversifying into real estate, foreign investments, etc. might also make sense but I\'m no expert on those."']

How are the $1 salaries that CEOs sometimes take considered legal?

['"Part of your first link has this statement that I suspect you are missing: However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Note that executive is in that list. As for the additional note: To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Generally which means, ""in most cases; usually."" is not a universal qualifier and thus exceptions can exist. I\'d imagine that restricted stock could be a way around some of the rules as there would be a monetary value there in the case of the stock for companies of a particular size."', '"Even under the executive exemption, see Exemption for Executive Employees Under the Fair Labor Standards Act (FLSA) Section 13(a)(1) as defined by Regulations, 29 CFR Part 541, it seems that a minimum compensation is required. To qualify for the executive employee exemption, all of the following tests must be met: The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week... etc. There is one other possibility under FLSA Section 13(a)(1), as a ""bona fide exempt executive"". Exemption of Business Owners Under a special rule for business owners, an employee who owns at least a bona fide 20-percent equity interest in the enterprise in which employed, regardless of the type of business organization (e.g., corporation, partnership, or other), and who is actively engaged in its management, is considered a bona fide exempt executive."', '"Taxable fringe benefits are included in taxable wages for the purpose of FLSA. So when those executives get to use company cars or company jets that value is ""wage"" even if it isn\'t salary."']

How hard for US customers make payments to non-resident freelancer by wire transfer?

['"Can you tell me please, is it really hard to make international wire transfer for payment my job and can i resolve this problem without using third party services? This is mostly a barrier, the form at times is quite complicated. For Russia, one has to enter ""Purpose of remittance"" ... at times select intermediate banks, give BIC and other details. This can become unnerving to people who are not used to it. The other option you can try is set-up a credit card gateway and get funds via cards."', 'For most major banks, wire transfers are simple, if expensive, to arrange. For example, I can initiate an international wire transfer from my online banking portal.', "I would look for an alternative wire transfer service that will charge less. I use ofx, but note that they don't do transfers to roubles. The rate adjusts by amount being transferred and there is a $15 fee for under $5000. Upside is it is bank-to-bank. 2 days tops.", '"You are right in insisting upon a proper B2B contract in any business relationship. You wish to reduce your risk and be compensated fairly. In addition to the cost and complexity of international wire transfers, the US companies may also be considering the fact that as an international contractor in a relatively hard-to-reach jurisdiction, payments to you place the company at higher risk than payments to a domestic contractor. By insisting upon PayPal or similar transmitters, they are reducing their internal complexity and reducing their financial exposure to unfulfilled/disputed contract terms. Therefore, wire payments are ""hard"" in an internal business sense, as well as in a remittance transfer reporting sense. The internal business procedure will likely be the hardest to overcome--changing risk management is harder than filling out forms."']

Will a credit card issuer cancel an account if it never incurs interest?

["While technically true, a card issuer can cancel your card for almost any reason they want, it's highly unlikely they'll cancel it because you pay your bills! There are many, many people out there that pay their bills in full every month without ever paying a cent in credit card interest. I wouldn't ever purposefully incur any interest on a credit card. Related anecdote: I used to have a credit card that I only used for gas purchases because they gave 5% off for fuel. The issuer eventually discontinued the program (I assume because people like me took advantage of it.) So while they didn't cancel my card, the bonus eventually went away. I miss that card. My conclusion: if you can take advantage of promotional rates, by all means, go for it. You don't owe them any favors. Enjoy it as long as it lasts.", "Remember, the card company gets a percentage at the time of purchase, as well as any interest you let them collect from you. Yes, they're still making a profit on our accounts, and they can always hope that at some point we'll run up a high enough bill to be willing to pay some interest. They may kill completely inactive cards, since they need a bit of income to pay for processing the account. But if you're actively using it, they aren't very likely to tell you to go away (though they may change which plan(s) they offer you).", "Credit card companies are businesses. Businesses will make any decision that makes them money. So does it make them money to cancel your account? It's a simple cost-benefit analysis: you having an account with them will probably give them some benefit for very little cost to them. The only real cost associated with an open account is someone who uses the card but doesn't pay, but they're pretty sure you won't be doing that.", '"I would think it extremely unlikely that an issuer would cancel your card for having an ADB of approximately zero. The issuer charges the vendor that accepts a card a percentage of the transaction (usually up to ~3%, AMEX is generally higher) - so they are making money even if you carry no balance on your card (the specific language for various vendor-side (acceptor) credit card agreements boils down to ""we are essentially giving you, the vendor, a short-term loan and you will pay us for it). This why you see credit-card minimum purchase amounts at places like hot-dog stands - they\'re getting nailed on the percentage. This is also why, when given the choice between ""Debit or Credit"" for a particular card, I choose where to put the hit on the company I like less - the retailer or the bank."', '"Speaking from personal experience: I have had a credit card canceled for exactly this reason. It\'s happened to me three times, with two different providers (NatWest and Nationwide). After the third instance I stopped bothering to even carry a credit card. It\'s worth noting that all three were ""free"" cards in the sense that I paid no flat fee or subscription to get the cards. The only way the issuer could make a profit on them was through interest. I was also not a frequent user, carrying the card for convenience more than anything else, although I did make purchases on all three. So it\'s certainly a possibility. But I live in the UK and I\'m guessing most of your other respondents do not. It may be a practice that\'s more common here than in the US. That might even explain the origin of the rumour."', "Technically, yes but, in practice, no. I use a card for everything and pay it off every month. Sometimes, several times a month depending on how the month is going. In the last 10 years, I've paid a total of $8 in interest because I legitimately forgot to pay my balance before the statement came out when I was out of town. I wasn't late, I just didn't beat the statement and had a small interest charge that I couldn't successfully argue off. In the same time period, I've had one card cancelled at the banks request. The reason was that I hadn't used it in two years so they cancelled me. I never pay annual fees, I get cards with great rewards programs and I (almost) never pay interest. If your bank cancels your card because you're too responsible, find a better bank.", '"When you buy something with your credit card, the store pays a fee to the credit card company, typically a base fee of 15 to 50 cents plus 2 to 3% of the purchase. At least, that\'s what it was a few years back when I had a tiny business and I wanted to accept credit cards. Big chain stores pay less because they are ""buying in bulk"" and have negotiating power. Just because you aren\'t paying interest doesn\'t mean the credit card company isn\'t making money off of you. In fact if you pay your monthly bill promptly, they\'re probably making MORE off of you, because they\'re collecting 2 or 3% for a month or less, instead of the 1 to 2% per month that they can charge in interest. The only situation I know where you can get money from a credit card company for free is when they offer ""convenience checks"" or a balance transfer with no up-front fee. I get such an offer every now and then. I presume the credit card company does that for the same reason that stores give out free samples: they hope that if you try the card, you\'ll continue using it. To them, it\'s a marketing cost, no different than the cost of putting an ad on television."', "No, they won't cancel it because you pay your card on time. When a company offers a promotion like that they are banking on making money on average, not in every case. On average including all the benefits including transaction fees, deals for partnering with best buy, etc. Of course some people pay their credit card in full each month and never incur interest charges. However, credit card companies more than cover that with other people who aren't responsible. If it wasn't worth while they would end the card program or change it.", "Credit card merchant fees are $0.15 - $0.40 per transaction plus 1.5-4% of the amount charged. Card issuers are competing to get to be the card in your pocket that you use on a daily basis. If you were a card issuer, wouldn't you like to get 1.5-4% of every transaction I make for the rest of my life? As a side note, ever since I became a business owner and saw how much we are all paying for credit card merchant fees, I've patronized a lot more cash-only businesses. The best ones pass the savings directly on to the consumer.", "Some years ago a call center operator told me a bit more than they probably should have. They like to see a lot of money go through the card, but very little staying on the card. Yes, they make money on the interest but one card defaulting blows away the profit on a lot of other cards. The 3% take from the merchants is both reliable and up-front, not 6 months down the line when (and if) you pay the interest. So if you want to make your credit card company happy, pay your bills in full every month. I have credit far beyond my actual means because I run work expenses on my personal card, I was told they didn't care (and had already guessed) that it wasn't my money. The point was I was handling things in a way they liked. Not quite at Palladium status, but cards with $200 annual fees are mine for the asking, and I haven't paid interest since the early 1990's.", "I've got a card that I've had for about 25 years now. The only time they charged me interest I showed it was their goof (the automatic payment failed because of their mistake) and they haven't cancelled it. No annual fee, a bit of cash back. The only cards I've ever had an issuer close are ones I didn't use."]

Can LLC legally lend money to a friend?

['"One thing I would add to TTT\'s answer: One of the benefits of using an LLC for your business is right there in the name - ""limited liability"". It provides a level of protection for your personal assets should your business go bankrupt, get sued, and so forth. However, if someone can show that there\'s no real separation between your LLC\'s activities and your personal activities, then they can ""pierce the corporate veil"" and go after your personal assets. If this loan is really purely personal and not related to your business activities, you may create a paper trail that can later be used in this way. My advice would be to just avoid the whole thing and make the loan from personal funds. I don\'t see any upside to doing this out of the LLC funds."', "Legally, I can't find any reason that the LLC could not lend money to an individual. However, I believe the simplest course of action is to first distribute money from your company to your personal account, and then make it a personal loan. Whether the loan is done through the business or personally, financially I don't think there is much difference as to which bucket the interest income goes into, since your business and personal income will all get lumped together anyway with a single person LLC. Even if your friend defaults on the loan, either the business or you personally will have the same burden of proof to meet that the loan was not a gift to begin with, and if that burden is met, the deduction can be taken from either side. If a debt goes bad the debtor may be required to report the debt as income.", "I can't say if there is anything specific that makes lending illegal, but if your company goes bankrupt, you might end up in trouble. First, it's a loan. It must be repaid. It must be in the books as a loan, and if your company couldn't pay its bills, you would have to ask for the money back. If the company goes bankrupt, your creditors will ask for the loan to be repaid. Now if things are worse, your company goes bankrupt, and the person cannot pay back the money, then you could get into real trouble. Creditors won't like that situation at all. They will claim that you moved that money aside to protect it from creditors. They might be able to force you personally to pay, or even start criminal charges against you if you can't pay either. In the UK (and probably elsewhere) it's criminal for the company to pay dividends if that means it cannot fulfil its financial obligations. If there is no money left because of that loan, then you can't get dividend payments from your company. So as long as your company's finances are fine, and that person's finances are fine, you will be Ok (except I don't know if you would need a license), but if there are financial problems then being an LLC might not protect you.", '"The answer to your question is...it depends. Depending on the state you, your friend, and the LLC are located in, it can be very easy to run afoul of state banking laws, or to somehow violate some other statute pertaining to the legal activities an LLC may undertake by doing something like a loan. It is not unusual (or illegal) for officers or employees of a business entity to be loaned money by the company they work for, so something of this nature wouldn\'t be an issue with regulatory agencies. Having your LLC loan money to a friend who isn\'t an employee or officer of your LLC just might not be kosher though. The best advice I can give is that you should call the state banking commission or similar agency in your state and ask them whether what you want to do is alright. The LAST thing you want is to end up with auditors or regulators sniffing around your business, even if you haven\'t done anything wrong, and you certainly don\'t want to run the risk of accidentally ""piercing the corporate veil"", as someone else here astutely pointed out. Good luck!"', 'Tax accountant here. The money is yours and you can do what ever you want with it. Just make sure to put it on the books as Loan Receivable and have an Interest Income account.']

What is the purpose of endorsing a check?

['I actually had to go to the bank today and so I decided to ask. The answer I was given is that a check is a legal document (a promise to pay). In order to get your money from the bank, you need to sign the check over to them. By endorsing the check you are attesting to the fact that you have transferred said document to them and they can draw on that account.', '"The best reason for endorsing a check is in case it is lost. If the back is blank, a crooked finder could simply write ""pay to the order of "" on it and deposit it in his own account. You do not need a signature for the endorsement. The safest way to endorse a check is to write ""FOR DEPOSIT ONLY"" followed by an account number, in which case the signature is not needed. most businesses make up rubber stamps with this and stamp it the minute they receive a check. That way it has no value to anyone else. Depositing checks is increasingly going the way of the dodo. Many businesses today use check truncation - the business scans the check in, sends the digital image to the bank, and stores the check. I was surprised that Chase already has an applet for iPhones that you can use to deposit a check by taking a picture of it!"', "In my experience, you don't need to endorse a check with a signature to deposit it into your account. You do if you are exchanging the check for cash. Businesses usually have a stamp with their account number on them. Once stamped, those checks are only able to be deposited into that account. Individuals can do the same. I have had issues depositing insurance and government checks in the past that had both my and my wife's name on them. Both of us had to endorse the check to be able to deposit them. I think this was some kind of fraud prevention scheme, so that later one of us couldn't claim they didn't know anything about the check.", 'Paper trail of who did the deposit. Less significant for a personal account, but a bigger deal for accounts that are used by multiple people (e.g. a corporate checking account).', 'So the bank can (theoretically) compare that signature to the ID you provide, showing that the names and signatures match and that you are the person to whom the check was written.', '"I believe the banks are protecting themselves when they ""require"" your endorsement. Years ago. they used to ask for your endorsement, and not require it. If you endorse the check, it legally authorizes them to debit your account, if the check is later returned for non-sufficient funds (NSF). It mostly protects the bank, and not the customer."', 'When the check is deposited, the bank verifies the signature in the check matches your signature in file.']

Credit card statement dates follow pattern?

['My guess: they are giving you a constant number of days between when the bill is sent and when it is due. Due dates are usually set either: same date each month IE the 3rd of each month. same day IE first thursday of the month. Note: due date might vary based on weekends. Number of days in the month - date on bill should be pretty constant if due date option #1 is being used. Note how Feb dates were usually earlier, since it is a shorter month.', 'Check with your bank, usually a statement is either at the same day of month (e.g.: every 15th of the month), or every 30 days (e.g: March 15th, April 14th, May 14th, so forth). From my experience, most credit cards use the same day of month strategy. Keep in mind that if the day is not a business day (e.g.: weekend), the statement is closed either the previous or the next business day.', "Each bank is different. Usually in my experience for newer credit card accounts, there is a specific number of days in a billing cycle (something like 28) and then a 20-25 day grace period. Older accounts usually have 30+ day billing cycles. Back in the 90's, many cards also had 30-40 day grace periods. The language specific to your card is in the card agreement."]

Which credit card is friendliest to merchants?

['Cash is king. PIN-based debit transactions are cheap. In terms of credit cards, a regular (ie. not a gold card) with no rewards has the lowest rates. Bigger merchants with lots of card volume likely have better deals that make the differences less pronounced.', "Please don't waste any more time feeling bad for merchants for the charges they incur. I don't know who supported the lobby for this rule, but issuers no longer can demand that merchants accept all transactions (even the unprofitable ones). I discussed this at length on my blog. Merchants accept credit cards for one reason, and one reason only: it brings them more business. More people will buy, and on average they'll buy more. They used to take the occasional hit for someone buying a pack of gum with a credit card, but they don't have to anymore. The new law restricts issuers from imposing minimum transactions that are less than $10. I use a rewards card wherever possible. I get a cheaper price. In most cases I don't care what the merchant has to pay. They've already factored it into their prices. But if you are concerned, then as fennec points out in his comment, cash is the way to go.", "Accepting cash isn't free to the merchant's either. It needs to be counted, reconciled, stored, and taken to the bank each day. There is a certain amount that needs to be on-hand, not in the bank earning interest. There is more of a worry about employees taking cash from the register. There is the chance of inadvertently accepting counterfeit currency. I'm not sure how the cost of cash compares to the cost of accepting credit card, but there is a cost that cannot be ignored.", "From experience, Mastercard and Visa charge vendors about the same (around 2%-5%) while American Express and Diners Club are astonishingly expensive (6%-10%) and you'll find that few small retailers are very comfortable accepting these. The variation comes from the volume of trade that vendors provide. A big retailer will negotiate a very low rate while smaller businesses will be hit with higher charges.", "Back when they started, Discover undercut Visa and Amex fees by about a point. This was also true when I worked for a mail-order computer retailer in the '90s: if a customer asked us which credit cards we took, we were told to list Discover first (and AmEx last) because Discover had the lowest merchant charges. Possibly this is no longer true today, but for quite a while it was a significant selling point of the Discover card to merchants, and a reason why many did sign on. (A reason some stores did not sign on was that Discover was owned by Sears, and many businesses that competed with Sears didn't like the idea of sending any of their profits to the competition.) Today, Discover also owns Diners Club and the fees for those cards are higher.", "Merchants that accept American Express should have decided that the extra costs are worth the increased business (many business travelers only have an Amex Corporate Card). To complain about people actually using it after they've explicitly decided to accept it is a sign that they made the wrong decision, or that they are very short-sighted. No one is forcing them to take a particular card."]

How to properly collect money from corporate sponsors?

['http://www.legalzoom.com/business-management/starting-your-business/turn-your-calling Answering this, but I expect an expert to give an answer with some insight too There are many more steps, but not having done them personally I suggest you read the legalzoom.com site.', "If this is something you plan to continue doing it would make sense to create it as it's own business entity and then to get non-profit status eg: 501c3. Otherwise I'm pretty sure you have to think of it as YOU receiving the money as a sole proprietor - and file a couple more tax forms at the end of the year. I think it's a Schedule C. So essentially if you bring in $10,000, then you spend that $10,000 as legit business expenses for your venture your schedule C would show no profit and wouldn't pay taxes on it. BUT, you do have to file that form. Operating this way could have legal implications should something happen and you get sued. Having the proper business entity setup could help in that situation."]

Does longterm investment in index funds still make sense in a reality of massive algotrading?

["What the automation mostly does is make short-term trading that much more difficult. Day trading is a zero-sum game, so if they win more, everyone else wins less. Long term trading (years to decades) is a positive-sum game; the market as a whole tends to move upward for fairly obvious reasons (at its basis it's still investing, which in turn is based on lending, and as long as folks make fairly rational decisions about how much return they demand for their investment and the companies are mostly producing profits there will be a share of the profit coming back to the investors as dividends or increased share value or both. Day-to-day churn in individual stocks gets averaged out by diversification and time, and by the assumption that if you've waited that long you can wait a bit longer if necessary for jitters to settle out. Time periods between those will partake of some mix of the two.", 'There is a difference between trading which is short term focussed and investing which is longterm focussed. On the long term what drives stock prices is still the overall economy and the performance of the underlying business aspects. I do not think that any trading algorithms will change this. These are more concerned with short term profits regardless of the underlying business economics. Therefore I think that longterm investing using index funds is still a viable strategy for most private investors.', "Why wouldn't you expect a long-term profit? Say you buy 100 shares of company X, selling for$1/share today. You hold it for 20 years, after which it's worth $10/share (in inflation-adjusted dollars). So you've made a profit, only making two trades (buy & sell). What the algorithmic traders have done with short-term trades during those 20 years is irrelevant to you. Now expand the idea. You want some diversification, so instead of one stock, you buy a bit of all the stocks on whatever index interests you, and you just hold them for the same 20 years. How has what the short-term traders done in the intervening time affected you?"]

Why is the stock market price for a share always higher than the earnings per share?

['"Think about the implications if the world worked as your question implies that it ""should"": A $15 share of stock would return you (at least) $15 after 3 months, plus another $15 after 6 months, plus another after 9 and 12 months. This would have returned to you $60 over the year that you owned it (plus you still own the share). Only then would the stock be worth buying? Anything less than $60 would be too little to be worth bothering about for $15? Such a thing would indeed be worth buying, but you won\'t find golden-egg laying stocks like that on the stock market. Why? Because other people would outbid your measly $15 in order to get this $60-a-year producing stock (in fact, they would bid many hundreds of dollars). Since other people bid more, you can\'t find such a deal available. (Of course, there are the points others have brought up: the earnings per share are yearly, not quarterly, unless otherwise noted. The earnings may not be sent to you at all, or only a small part, but you would gain much of their value because the company should be worth about that much more by keeping the earnings.)"', '"When you buy a stock, you\'re really paying for a STREAM of earnings, from now till whenever. The job of an investor is to figure out how large that stream will be in the future. But if the stock price were the same as ""earnings"" (for one year), it would mean that you would get all future earnings for ""free."" That\'s not likely to happen unless 1) the company is in liquidation,"" meaning ""no future"" and 2) it earned ALL of the money it ever earned in the past year, meaning ""no past."" If there are likely to be any earnings in the future, you will have to pay for those future earnings, over and above what was earned in the most recent year."', "First, the earnings are per year, not per quarter. Why would you expect to get a 100% per year return on your money? The earnings can go one of two ways. They can be retained, reinvested in the company, or they can be distributed as a dividend. So, the 'return' on this share is just over 5%, which is competitive with the rate you'd get on fixed investments. It's higher, in fact, as there's the risk that comes with holding the stock.", "Earnings per share are not directly correlated to share price. NV Energy, the company you cited as an example, is an electric utility. The growth patterns and characteristics of utilities are well-defined, so generally speaking the value of the stock is driven by the quality of the company's cash flow. A utility with a good history of dividend increases, a dividend that is appropriate given the company's fiscal condition, (ie. A dividend that is not more than 80% of earnings) and a good outlook will be priced competitively. For other types of companies cash flow or even profits do not matter -- the prospects of future earnings matter. If a growth stock (say Netflix as an example) misses its growth projections for a quarter, the stock value will be punished.", "Stock prices are set by supply and demand. If a particular stock has a high EPS, say, $100, then people will bid more for that stock, driving up its price over one with a $10 EPS. Your job as an investor is to find stocks with low share prices, but which will give you high earnings (either in dividends, our future share price). This means finding stocks which you believe the market has priced incorrectly, for whatever reason (as an example, many bank stocks are being punished right now, even if the underlying banks are in good shape financially). If you want to beat the market indices, be prepared to do a lot of research, because you're trying to outsmart the market as a whole.", 'Imagine a stock where the share price equals the earnings per share. You pay say $100 for a share. In the next year, the company makes $100 per share. They can pay a $100 dividend, so now you have your money back, and you still own the share. Next year, they make $100 per share, pay a $100 dividend, so now you have your money back, plus $100 in your pocket, plus you own the share. Wow. What an incredible investment.', 'What you have to remember is you are buying a piece of the company. Think of it in terms of buying a business. Just like a business, you need to decide how long you are willing to wait to get paid back for your investment. Imagine you were trying to sell your lemonade stand. This year your earnings will be $100, next year will be $110, the year after that $120 and so on. Would you be willing to sell it for $100?']

What could a malicious party potentially achieve by having *just* a name, account number, and sort code?

["I think the answer to this must differ from country to country. I have lived in several countries where the normal everyday way of making a payment is to instruct my bank to transfer the money to the recipient's account. Of course this means I must know his name, SC and account number – but this is an accepted part of the system; businesses routinely display that information on invoices and correspondence. It is simply not regarded as confidential. DumbCoder's comment suggests that if he has that information he can take money from my account without my permission – in other words, my bank will pay money out of my account on someone else's request, without my authority. Is this correct? In which country or countries can this happen? (I must go there quickly and begin stealing people's money.)", "When you want to pay a bill on line there are several ways to do it. You can give them your credit card details: Name on Card, zip code, credit card number, and 3 or 4 digit security code on the back. Most of the information is available on the card or via an easy Google search. If the crook has your card they can use it to buy something. You can contact your bank's website and establish a one time or recurring transfer. You provide the information about the person/company. Your bank knows who you are because you used a secure system and your password. Their bank accepts the money because who would refuse money, they don't care who you are. You can provide the company with your bank info (bank number, your account number, and your name). If your bank limits their transactions via this method only to legitimate organizations, then your money will only be sent to legitimate organizations. But if the organization has no way of knowing who is on the other end of the phone or webpage, they may be withdrawing money from a bank account without the account owners permission. In the example article a person found a charity that had lax security standards, they were recognized by the bank as a legitimate organization, so the bank transferred the money. The charity will point to the form and say they had permission from the owner, but in reality they didn't. The subject of the article was correct, all the info required is on every check. It is just that most people are honest, and the few security hurdles that exist do stop most of the fraud.", "I disagree with Dumbcoder's response. Setting up a DD is not easily approved by the banks as you must prove a existing business cash flow. And secondly you cannot empty someone's account via DD as they are protected by the DD mandate. (Money goes out, complaint is made, money goes back in, the registered business with the DD facility has some serious explaining to do to the bank and FCA). Dumbcoder you likely work in a middle position of a company.."]

What's the difference between a high yield dividend stock vs a growth stock?

['"I think Fidelity has a very nice introduction to Growth vs Value investing that may give you the background you need. People love to put stocks in categories however the distinction is more of a range and can change over time. JB King makes a good point that for most people the two stocks you mentioned would both be considered value right now as they are both stable companies with a significant dividend. You are correct though Pfizer might be considered ""more growth."" A more drastic example would be the difference between Target and Amazon. Both are retail companies that sell a wide variety of products. Target is a value company: a established company with stable revenues that uses its income to give a fairly stable dividend. Amazon is a growth company: that is reinvesting its revenues back into the corporation to grow itself as fast as possible. The price of the Amazon stock reflects what people think will be future growth (future income) for the company. Whereas Target\'s price appears to be based on the idea that future income will be similar to current income. You can see why growth companies like Amazon might be more risky as that growth you paid a high price for may not be realized, but the payout may be much higher as well."', '"The two are not incompatible. This is particularly true of Glaxo and Pfizer, two drug companies operating in roughly the same markets with similar products. Many ""good"" companies offer a combination of decent yields and growth. Glaxo and Pfizer are both among them. There is often (not always), a trade-off between high yield and high growth. All other things being equal, a company that pays out a larger percentage of its profits as dividends will exhibit lower growth. But a company may have a high yield because of a depressed price due to short term problems. When those problems are fixed, the company and stock grows again, giving you the best (or at least the better) of both worlds."', "The general difference between high dividend paying stocks and growth stocks is as follows: 1) A high dividend paying stock/company is a company that has reached its maximum growth potential in a market and its real growth (that is after adjustment of inflation) is same (more or less) as the growth of the economy. These companies typically generate a lot of cash (Cash Cow) and has nowhere to really invest the entire thing, so they pay high dividends. Typically Fast Moving Consumer Goods (FMCG) ,Power/Utility companies, Textile (in some countries) come into this category. If you invest in these stocks, expect less growth but more dividend; these companies generally come under 'defensive sector' of the market i.e. whose prices do not fall drastically during down turn in a market. 2) Growth stocks on the other hand are the stocks that are operating in a market that is witnessing rapid growth, for example, technology, aerospace etc. These companies have high growth potential but not much accumulated income as the profit is re-invested to support the growth of the company, so no dividend (you will be typically never get any/much dividend from these companies). These companies usually (for some years) grow (or at least has potential to grow) more than the economy and provide real return. Usually these companies are very sensitive to results (good or bad) and their prices are quite volatile. As for your investment strategy, I cannot comment on that as investment is a very subjective matter. Hope this helps", "There can be the question of what objective do you have for buying the stock. If you want an income stream, then high yield stocks may be a way to get dividends without having additional transactions to sell shares while others may want capital appreciation and are willing to go without dividends to get this. You do realize that both Pfizer and GlaxoSmithKline are companies that the total stock value is over $100 billion yes? Thus, neither is what I'd see as a growth stock as these are giant companies that would require rather large sales to drive earnings growth though it may be interesting to see what kind of growth is expected for these companies. In looking at current dividends, one is paying 3% and the other 5% so I'm not sure either would be what I'd see as high yield. REITs would be more likely to have high dividends given their structure if you want something to research a bit more.", 'If you are looking to re-invest it in the same company, there is really no difference. Please be aware that when a company announces dividend, you are not the only person receiving the dividend. The millions of share holders receive the same amount that you did as dividend, and of course, that money is not falling from the sky. The company pays it from their profits. So the day a dividend is announced, it is adjusted in the price of the share. The only reason why you look for dividend in a company is when you need liquidity. If a company does not pay you dividend, it means that they are usually using the profits to re-invest it in the business which you are anyway going to do with the dividend that you receive. (Unless its some shady company which is only established on paper. Then they might use it to feed their dog:p). To make it simpler lets assume you have Rs.500 and you want to start a company which requires Rs 1000 in capital : - 1.) You issue 5 shares worth Rs 100 each to the public and take Rs 100 for each share. Now you have Rs 1000 to start your company. 2.) You make a profit of Rs 200. 3.) Since you own majority of the shares you get to make the call whether to pay Rs.200 in dividend, or re-invest it in the business. Case 1:- You had issued 10 shares and your profit is Rs 200. You pay Rs. 20 each to every share holder. Since you owned 5 shares, you get 5*20 that is Rs.100 and you distribute the remaining to your 5 shareholders and expect to make the same or higher profit next year. Your share price remains at Rs.100 and you have your profits in cash. Case 2:- You think that this business is awesome and you should put more money into it to make more. You decide not to pay any dividend and invest the entire profit into the business. That way your shareholders do not receive anything from you but they get to share profit in the amazing business that you are doing. In this case your share price is Rs. 120 ((1000+200)/10) and all your profits are re-invested in the business. Now put yourself in the shareholders shoes and see which case suits you more. That is the company you should invest in. Please note: - It is very important to understand the business model of the company before you buy anything! Cheers,']

Return of value to shareholders in an ISA

['"You will receive a combination of Verizon shares and cash whether you chose option B or C. Option B means that your ""Return of Value"" will be treated as capital - ie: as a capital gain. Option C means that your ""Return of Value"" will be treated as income - ie: as a dividend. As your ISA has favourable tax status, you don\'t end up paying any capital gain tax or income tax on dividend income. So it won\'t matter which option you chose."']

When filing for an NOL, do you have to file the amended previous years' returns after the NOL return?

["Your CPA doesn't need to file anything, so don't worry about him being sidetracked. You are the one doing the filing. Since the amended returns have to be filed on paper, you'll actually go and mail a package to the IRS (each return in a separate envelope). The reason the CPA suggests to file the amended returns after the current one, is to ensure the NOL is registered in the system before the amended returns are processed. The IRS doesn't have to automatically accept the amended returns, and if there's no NOL on the current year they may just bounce the amended returns back to you. Keep in mind that since you haven't filed your return by the due date (including extensions), you're now unable to forego the carry-back. I don't know if you discussed this with your CPA, but you're allowed, if you chose so, to not apply the NOL to prior years, and instead to apply it forward for the next 20 years (or until it runs out). Depending on your income pattern, that might have been something you could have considered, but you can only chose this if you file a statement before the due date (with extensions), which is now passed."]

How much cash on hand should one have?

["You seem to have a grasp of the basic principles involved, but your estimation of the risk you are taking seems a bit low. Your non-investment reserves are unlikely to cover your expenses for more than a month, so the chance that you would need to sell investments to cover additional expenses is high. You mention that I am flexible with the 'cash on hand' amount. For instance, for about three months I put a very tight spending/investing freeze on my life because I knew I'd be leaving jobs and moving (I already had the other job lined up). Those savings presumably went toward moving expenses, as your usual savings were insufficient. In the event that you are laid off suddenly, you might find yourself in the same position again, with added unplanned expenses like fees for breaking a lease. Your current plan involves selling investments to cover the gap. Based on your age you have probably only invested in a predominantly positive market, so the chance that you might need to sell investments for cash seems like a reasonable trade-off for the added potential gains. Your perception might change if the markets go south and you are forced to sell into a down market, possibly at a significant loss. You also don't indicate if your investments are currently sufficient to cover an extended period of unemployment. You are taking on a lot of risk under your current plan. Essentially you are trading possible investment gains for flexibility and time. By making small changes like saving at least enough to move as you did previously, you can give yourself time to react to job loss or other unexpected financial need. Rather than give the traditional emergency funds advice, I suggest you look at the broader picture. The total amount of savings/risk is up to you, but you should consider your current savings as insufficient to rely on as a safety net.", "There are two or three issues here. One is, how quickly can you get cash out of your investments? If you had an unexpected expense, if you suddenly needed more cash than you have on hand, how long would it take to get money out of your Scott Trade account or wherever it is? I have a TD Ameritrade account which is pretty similar, and it just takes a couple of days to get money out. I'm hard pressed to think of a time when I literally needed a bunch of cash TODAY with no advance warning. What sudden bills is one likely to have? A medical bill, perhaps. But hey, just a few weeks ago I had to go to the emergency room with a medical problem, and it's not like they demanded cash on the table before they'd help me. I just got the bill, maybe 3 weeks after the event. I've never decided to move and then actually moved 2 days later. These things take SOME planning. Etc. Second, how much risk are you willing to tolerate? If you have your money in the stock market, the market could go down just as you need the cash. That's not even a worst case scenario, extreme scenario. After all, if the economy gets bad, the stock market could go down, and the same fact could result in your employer laying you off. That said, you could reduce this risk by keeping some of your money in a low-risk investment, like some high-quality bonds. Third, you want to have cash to cover the more modest, routine expenses. Like make sure you always have enough cash on hand to pay the rent or mortgage, buy food, and so on. And fourth, you want to keep a cushion against bookkeeping mistakes. I've had twice in my life that I've overdrawn a checking account, not because I was broke, but because I messed up my records and thought I had more money in the account than I really did. It's impossible to give exact numbers without knowing a lot about your income and expenses. But for myself: I keep a cushion of $1,000 to $1,5000 in my checking account, on top of all regular bills that I know I'll have to pay in the next month, to cover modest unexpected expenses and mistakes. I pay most of my bills by credit card for convenience --and pay the balance in full when I get the bill so I don't pay interest -- so I don't need a lot of cushion. I used to keep 2 to 3 months pay in an account invested in bonds and very safe stocks, something that wouldn't lose much value even in bad times. Since my daughter started college I've run this down to less than 1 months pay, and instead of replacing that money I'm instead putting my spare money into more general stocks, which is admittedly riskier. So between the two accounts I have a little over 2 months pay, which I think is low, but as I say, I'm trying to get my kids through college so I've run down my savings some. I think if I had more than 6 months pay in easily-liquidated assets, then unless I expected to need a bunch of cash for something, buying a new house or some such, I'd be transferring that to a retirement account with tax advantages.", "Less than 2 1/2% of all US currency actually exists. The rest is digital entries. In a financial crisis you'll need lots of rare cash. Twenty dollar bills are the best choice. Stash as many as you can afford to. Best to stash in a anchored security safe. And for goodness sakes, don't tell anyone."]

Do overall 401(k) contribution limits sum across employers?

["Let me first start off by saying that you need to be careful with an S-Corp and defined contribution plans. You might want to consider an LLC or some other entity form, depending on your state and other factors. You should read this entire page on the irs site: S-Corp Retirement Plan FAQ, but here is a small clip: Contributions to a Self-Employed Plan You can’t make contributions to a self-employed retirement plan from your S corporation distributions. Although, as an S corporation shareholder, you receive distributions similar to distributions that a partner receives from a partnership, your shareholder distributions aren’t earned income for retirement plan purposes (see IRC section 1402(a)(2)). Therefore, you also can’t establish a self-employed retirement plan for yourself solely based on being an S corporation shareholder. There are also some issues and cases about reasonable compensation in S-Corp. I recommend you read the IRS site's S Corporation Compensation and Medical Insurance Issues page answers as I see them, but I recommend hiring CPA You should be able to do option B. The limitations are in place for the two different types of contributions: Elective deferrals and Employer nonelective contributions. I am going to make a leap and say your talking about a SEP here, therefore you can't setup one were the employee could contribute (post 1997). If your doing self employee 401k, be careful to not make the contributions yourself. If your wife is employed the by company, here calculation is separate and the company could make a separate contribution for her. The limitation for SEP in 2015 are 25% of employee's compensation or $53,000. Since you will be self employed, you need to calculate your net earnings from self-employment which takes into account the eductible part of your self employment tax and contributions business makes to SEP. Good read on SEPs at IRS site. and take a look at chapter 2 of Publication 560. I hope that helps and I recommend hiring a CPA in your area to help."]

Indie Software Developers - How do I handle taxes?

["I think the best advice you're going to get on the subject is: If you made $250k in half a year, you definitely have enough to hire an accountant! Get professional help on the subject, and they'll make sure you don't end up getting in any legal trouble.", '"This is not an end-all answer but it\'ll get you started I have been through accounting courses in college as well as worked as a contractor (files as sole proprietor) for a few years but IANAA (I am not an accountant). Following @MasonWheeler\'s answer, if you\'re making that much money you should hire a bean counter to at least overlook your bookkeeping. What type of business? First, if you\'re the sole owner of the business you will most likely file as a sole proprietorship. If you don\'t have an official business entity, you should get it registered officially asap, and file under that name. The problem with sole proprietorships is liability. If you get sued, not only are your business\' assets vulnerable but they can go after your personal assets too (including house/cars/etc). Legally, you and your business are considered one and the same. To avoid liability issues, you could setup a S corporation. Basically, the business is considered it\'s own entity and legal matters can only take as much as the business owns. You gain more protection but if you don\'t explicitly keep your business finances separate from your personal finances, you can get into a lot of trouble. Also, corporations generally pay out more in taxes. Technically, since the business is it\'s own entity you\'ll need to pay yourself a \'reasonable salary\'. If you skip the salary and pay yourself the profits directly (ie evade being taxed on income/salary) the IRS will shut you down (that\'s one of the leading causes of corporations being shut down). You can also pay distribute bonuses on top of that but it would be wise to burn the words \'within reason\' into your memory first. The tax man gets mad if you short him on payroll taxes. S corporations are complicated, if you go that route definitely seek help from an accountant. Bookkeeping If you\'re not willing to pay a full time accountant you\'ll need to do a lot of studying about how this works. Generally, even if you have a sole proprietorship it\'s best to have a separate bank account for all of your business transactions. Every source/drain of money will fall into one of 3 categories... Assets - What your business owns: Assets can be categorized by liquidity. Meaning how fast you can transform them directly into cash. Just because a company is worth a lot doesn\'t necessarily mean it has a lot of cash. Some assets depreciate (lose value over time) whereas some are very hard to transform back into cash based on the value and/or market fluctuations (like property). Liabilities - What you owe others and what others owe you: Everything you owe and everything that is owed to you gets tracked. Just like credit cards, it\'s completely possible to owe more than you own as long as you can pay the interest to maintain the loans. Equity - the net worth of the company: The approach they commonly teach in schools is called double-entry bookkeeping where they use the equation: In practice I prefer the following because it makes more sense: Basically, if you account for everything correctly both sides of the equation should match up. If you choose to go the sole proprietorship route, it\'s smart to track everything I\'ve mentioned above but you can choose to keep things simple by just looking at your Equity. Equity, the heart of your business... Basically, every transaction you make having to do with your business can be simplified down to debits (money/value) increasing and credits (money/value) decreasing. For a very simple company you can assess this by looking at net profits. Which can be calculated with: Revenues, are made up of money earned by services performed and goods sold. Expenses are made up of operating costs, materials, payroll, consumables, interest on liabilities, etc. Basically, if you brought in 250K but it cost you 100K to make that happen, you\'ve made 150K for the year in profit. So, for your taxes you can count up all the money you\'ve made (Revenues), subtract all of the money you\'ve paid out (Expenses) and you\'ll know how much profit you\'ve made. The profit is what you pay taxes on. The kicker is, there are gray areas when it comes to deducting expenses. For instance, you can deduct the expense of using your car for business but you need to keep a log and can only expense the miles you traveled explicitly for business. Same goes for deducting dedicated workspaces in your house. Basically, do the research if you\'re not 100% sure about a deduction. If you don\'t keep detailed books and try to expense stuff without proof, you can get in trouble if the IRS comes knocking. There are always mythical stories about \'that one guy\' who wrote off his boat on his taxes but in reality, you can go to jail for tax fraud if you do that. It comes down to this. At the end of the year, if your business took in a ton of money you\'ll owe a lot in taxes. The better you can justify your expenses, the more you can reduce that debt. One last thing. You\'ll also have to pay your personal federal/state taxes (including self-employment tax). That means medicare/social security, etc. If this is your first foray into self-employment you\'re probably not familiar with the fact that 1099 employers pick up 1/2 of the 15% medicare/social security bill. Typically, if you have an idea of what you make annually, you should be paying this out throughout the year. My pay as a contractor was always erratic so I usually paid it out once/twice a year. It\'s better to pay too much than too little because the gov\'t will give you back the money you overpaid. At the end of the day, paying taxed sucks more if you\'re self-employed but it balances out because you can make a lot more money. If as you said, you\'ve broken six figures, hire a damn accountant/adviser to help you out and start reading. When people say, ""a business degree will help you advance in any field,"" it\'s subjects like accounting are core requirements to become a business undergrad. If you don\'t have time for more school and don\'t want to pay somebody else to take care of it, there\'s plenty of written material to learn it on your own. It\'s not rocket surgery, just basic arithmetic and a lot of business jargon (ie almost as much as technology)."', "First of all, consult an accountant who is familiar with tax laws and online businesses. While most accountants know tax laws, fewer know how to handle online income like you describe although the number is growing. Right now, since you're a minor, this complicates things a bit. That's why you'll need a tax accountant to come up with the best business structure to use. You'll need to keep your own records to estimate your quarterly taxes. At the amount you're making, you'll want to do this since you'll pay a substantial penalty at the end of the year if you don't. You can use a small business accounting software package for this or just track everything using Excel or the like. As long as taxes are paid, you won't go to jail. But you need to pay them along with any penalties by April 15, 2013. If you don't do this, then the IRS will want to have a 'discussion' with you.", '"First of all congrats... very nice work indeed.. Secondly, i do not offer this as legal advise.. lol.. anyhow.. you need to make sure to hang on to as much as possible, being a single earner, our Uncle (Sam) is going to want what\'s due... That being said, you should probably look into investments, for starters, purchase a primary residence or start a business, or purchase a primary residence and use that as a business residence (both).. what you basically want are write-offs.. you need to bring your ""taxable"" income as low as possible so you pay minimal taxes.. in your case, you\'re in danger of paying a hefty sum in taxes... i\'m sure you can shield yourself with various business expenses (a car, workplace, computers, etc.. ) that you could benefit from, both professionally and individually.. and then seriously bro... making 250k leads me to believe you\'ve got at least more than half a brain, and that you\'re using more than half of that.. so dude.. get an accountant... and one you can trust.. ask your parents, colleagues, people you\'ve worked with in the past.. etc.. there are professionals who are equally as talented in helping you keep your money as you are in making it.. -OR- you could get married, make sure your wife stays at home and start popping out kids asap... those keep my taxable (and excess) income pretty low.. LOL!!! I\'m going to add to this... as a contractor, i\'ve generally put any ""estimated"" taxes into some kind of interest accruing account so i can at least make a little money before i have to give it away.. in your case, i\'d say put away at least 2/3\'s into some kind of interest earning account.. start by talking to your personal banker wherever your money is.. you\'ll be surprised at how nice they treat you... you ARE going to have to pay taxes.. so until you do, try to make a little money while it sits.. again, nice problem to have!"', '"The ""hire a pro"" is quite correct, if you are truly making this kind of money. That said, I believe in a certain amount of self-education so you don\'t follow a pro\'s advice blindly. First, I wrote an article that discussed Marginal Tax Rates, and it\'s worth understanding. It simply means that as your income rises past certain thresholds, the tax rate also will change a bit. You are on track to be in the top rate, 33%. Next, Solo 401(k). You didn\'t ask about retirement accounts, but the combined situations of making this sum of money and just setting it aside, leads me to suggest this. Since you are both employer and employee, the Solo 401(k) limit is a combined $66,500. Seems like a lot, but if you are really on track to make $500K this year, that\'s just over 10% saved. Then, whatever the pro recommends for your status, you\'ll still have some kind of Social Security obligation, as both employer and employee, so that\'s another 15% or so for the first $110K. Last, some of the answers seemed to imply that you\'ll settle in April. Not quite. You are required to pay your tax through the year and if you wait until April to pay the tax along with your return, you will have a very unpleasant tax bill. (I mean it will have penalties for underpayment through the year.) This is to be avoided. I offer this because often a pro will have a specialty and not go outside that focus. It\'s possible to find the guy that knows everything about setting you up as an LLC or Sole Proprietorship, yet doesn\'t have the 401(k) conversation. Good luck, please let us know here how the Pro discussion goes for you."', "Congratulations! I would start with an attorney. As a 17 year old, you legally cannot sign contracts, so you're going to have to setup some sort of structure with your parents first. Get attorney references -- your parents can ask around at work, if you're friendly with any business owners, ask them, etc. Talk to a few and pick someone who you are comfortable with. Ask your attorney for advice re: sole proprietor/S-Corp/LLC. You have assets, and your parents presumably have some assets, so you need advice about isolating your business from the rest of your life. Do the same thing for accountant references, but ask your attorney for a reference as well."]

Are Index Funds really as good as “experts” claim?

['"I actually love this question, and have hashed this out with a friend of mine where my premise was that at some volume of money it must be advantageous to simply track the index yourself. There some obvious touch-points: Most people don\'t have anywhere near the volume of money required for even a $5 commission outweigh the large index fund expense ratios. There are logistical issues that are massively reduced by holding a fund when it comes to winding down your investment(s) as you get near retirement age. Index funds are not touted as categorically ""the best"" investment, they are being touted as the best place for the average person to invest. There is still a management component to an index like the S&P500. The index doesn\'t simply buy a share of Apple and watch it over time. The S&P 500 isn\'t simply a single share of each of the 500 larges US companies it\'s market cap weighted with frequent rebalancing and constituent changes. VOO makes a lot of trades every day to track the S&P index, ""passive index investing"" is almost an oxymoron. The most obvious part of this is that if index funds were ""the best"" way to invest money Berkshire Hathaway would be 100% invested in VOO. The argument for ""passive index investing"" is simplified for public consumption. The reality is that over time large actively managed funds have under-performed the large index funds net of fees. In part, the thrust of the advice is that the average person is, or should be, more concerned with their own endeavors than they are managing their savings. Investment professionals generally want to avoid ""How come I my money only returned 4% when the market index returned 7%? If you track the index, you won\'t do worse than the index; this helps people sleep better at night. In my opinion the dirty little secret of index funds is that they are able to charge so much less because they spend $0 making investment decisions and $0 on researching the quality of the securities they hold. They simply track an index; XYZ company is 0.07% of the index, then the fund carries 0.07% of XYZ even if the manager thinks something shady is going on there. The argument for a majority of your funds residing in Mutual Funds/ETFs is simple, When you\'re of retirement age do you really want to make decisions like should I sell a share of Amazon or a share of Exxon? Wouldn\'t you rather just sell 2 units of SRQ Index fund and completely maintain your investment diversification and not pay commission? For this simplicity you give up three basis points? It seems pretty reasonable to me."', "Why would it not make more sense to invest in a handful of these heavyweights instead of also having to carry the weight of the other 450 (some of which are mostly just baggage)? First, a cap-weighted index fund will invest more heavily in larger cap companies, so the 'baggage' you speak of does take up a smaller percentage of the portfolio's value (not that cap always equates to better performance). There are also equal-weighted index funds where each company in the index is given equal weight in the portfolio. If you could accurately pick winners and losers, then of course you could beat index funds, but on average they've performed well enough that there's little incentive for the average investor to look elsewhere. A handful of stocks opens you up to more risk, an Enron in your handful would be pretty devastating if it comprised a large percentage of your portfolio. Additionally, since you pay a fee on each transaction ($5 in your example), you have to out-perform a low-fee index fund significantly, or be investing a very large amount of money to come out ahead. You get diversification and low-fees with an index fund.", 'Picking yourself is just what all the fund managers are trying to do, and history shows that the majority of them fails the majority of the time to beat the index fund. That is the core reason of the current run after index funds. What that means is that although it doesn’t sound so hard, it is not easy at all to beat an index consistently. Of course you can assume that you are better than all those high-paid specialists, but I would have some doubt. You might be luckier, but then you might be not.', "The point of buying an index fund is that you don't have to pick winners. As long as the winners are included in the index fund (which can include far more than 500 stocks), you benefit on average because of overall upward historical market performance. Picking only the top 50 capitalized stocks in the S&P 500 does not guarantee you will successfully track the S&P 500 index because the stocks in the tail can account for an outsized amount of overall growth; the top 50 stocks by market capitalization change over time, and these stocks are not necessarily the stocks that perform better. As direct example, the 10 year average annual return for the S&P top 50 is 4.52%, while the 10 year average annual return for the S&P 500 is 5.10%. Issues of trading and balancing to maintain these aside, these indices are not the same.", '"Two main points to answer this in my opinion. First, most people don\'t start with say half a million dollar to buy all the stocks they need in one shot but rather they accumulate this money gradually. So they must make many Buys in their lifetime. Similarly, most people don\'t need to withdraw all their investment in one day (and shouldn\'t do this anyway as it cuts the time of investment). So there will be many Sells. Performing a single buy or sell per year is not efficient since it means you have lots of cash sitting doing nothing. So in this sense, low cost indexing lets you quickly invest your money (and withdraw it when needed after say you retire) without worrying about commission costs each time. The second and most important point to me to answer this is that we should make a very clear distinction between strategy and outcome. Today\'s stock prices and all the ups and downs of the market are just one possible outcome that materialized from a virtually uncountable number of possible outcomes. It\'s not too hard to imagine that tomorrow we hear all iPhones explode and Apple stock comes crashing down. Or that in a parallel universe Amazon never takes off and somehow Sears is the king of online commerce. Another item in the ""outcome"" category is your decisions as a human being of when to buy and sell. If that exploding iPhone event does occur, would you hold on to your stocks? Would you sell and cut your losses? Does the average person make the same decision if they had $1000 invested in Apple alone vs $1M? Index investing offers a low cost strategy that mitigates these uncertainties for the average person. Again here the key is the word ""average"". Picking a handful of the heavyweight stocks as you mention might give you better returns in 30 years, but it could just as easily give you worse. And the current data suggest the latter is more likely. ""Heavyweights"" come and go (who were they 30 years ago?) and just like how the other 450 companies may seem right now as dragging down the portfolio, just as easily a handful of them can emerge as the new heavyweights. Guaranteed? No. Possible? Yes. Jack Bogle is simply saying low cost indexing is one of the better strategies for the average person, given the data. But nowhere is it guaranteed that in this lifetime (e.g. next 30 years) will provide the best outcome. Berkshire on the other hand are in the business of chasing maximum outcomes (mid or short term returns). It\'s two different concepts that shouldn\'t be mixed together in my opinion."', '"Comparing index funds to long-term investments in individual companies? A counterintuitive study by Jeremy Siegel addressed a similar question: Would you be better off sticking with the original 500 stocks in the S&P 500, or like an index fund, changing your investments as the index is changed? The study: ""Long-Term Returns on the Original S&P 500 Companies"" Siegel found that the original 500 (including spinoffs, mergers, etc.) would do slightly better than a changing index. This is likely because the original 500 companies take on a value (rather than growth) aspect as the decades pass, and value stocks outperform growth stocks. Index funds\' main strength may be in the behavior change they induce in some investors. To the extent that investors genuinely set-and-forget their index fund investments, they far outperform the average investor who mis-times the market. The average investor enters and leaves the market at the worst times, underperforming by a few percentage points each year on average. This buying-high and selling-low timing behavior damages long-term returns. Paying active management fees (e.g. 1% per year) makes returns worse. Returns compound on themselves, a great benefit to the investor. Fees also compound, to the benefit of someone other than the investor. Paying 1% annually to a financial advisor may further dent long-term returns. But Robert Shiller notes that advisors can dissuade investors from market timing. For clients who will always follow advice, the 1% advisory fee is worth it."', '"Here is my simplified take: In any given market portfolio the market index will return the average return on investment for the given market. An actively managed product may outperform the market (great!), achieve average market performance (ok - but then it is more expensive than the index product) or be worse than the market (bad). Now if we divide all market returns into two buckets: returns from active investment and returns from passive investments then these two buckets must be the same as index return are by definition the average returns. Which means that all active investments must return the average market return. This means for individual active investments there are worse than market returns and better then market returns - depending on your product. And since we can\'t anticipate the future and nobody would willingly take the ""worse than market"" investment product, the index fund comes always up on top - IF - you would like to avoid the ""gamble"" of underperforming the market. With all these basics out of the way: if you can replicate the index by simply buying your own stocks at low/no costs I don\'t see any reason for going with the index product beyond the convenience."', 'A lot of it boils down to these key points:', '"Simply put, you cannot deterministically beat the market. If by being informed and following all relevant news, you can arrive at the conclusion that company A will likely outperform company B in the future, then having A stocks should be better than having B stocks or any (e.g., index based) mix of them. But as the whole market has access to the very same information and will arrive at the same conclusion (provided it is logically sound), ""everybody"" will want A stocks, which thus become expensive to the point where the expected return is average again. Your only options of winning this race are to be the very first to have the important information (insider trade), or to arrive at different logical conclusions than the rest of the world (which boils down do making decisions that are not logically sound - good luck with that - or assuming that almost everybody else is not logically sound - go figure)."']

Should you check to make sure your employer is paying you the correct superannuation amount? [Australia]

['As poolie mentioned, you should get online access to your account. This will do a couple of things: Also, consolidate any super you have with different companies. Now.', "Yes, there are checks and balances. Employers can be, and have been, prosecuted for failing to pay super before the statutory timeline, which is three months from the pay date. However, it is still in your interests to check for yourself. The most common point for missing super to be discovered is when the company goes broke, at which point it's too late for you. What you should do is Check on your payslips that the right amount is allocated to super. It should be 9% of gross, plus any salary sacrifice or additional component. Check your super fund's half-yearly statements line up the deductions given on your payslip. Consider getting online access to your super account so you can check more quickly. If something is missing, call your super fund and/or payroll office. Resources:"]

Depositing a check with a DBA on the title

["Assuming it's your business, endorse the check as yourself and your DBA name, payable to your personal account"]

What do brokers do with bad stock?

['"Market makers, traders, and value investors would be who I\'d suspect for buying the stock that is declining. Some companies stocks can come down considerably which could make some speculators buy the stock at the lower price thinking it may bounce back soon. ""Short sellers"" are out to sell borrowed stocks that if the stock is in free fall, unless the person that shorted wants to close the position, they would let it ride. Worthless stocks are a bit of a special case and quite different than the crash of 1929 where various blue chip stocks like those of the Dow Jones Industrials had severe declines. Thus, the companies going down would be like Apple, Coca-Cola and other large companies that people would be shocked to see come down so much yet there are some examples in recent history if one remembers Enron or Worldcom. Stocks getting delisted tend to cause some selling and there are some speculators may buy the stock believing that the shares may be worth something only to lose the money possibly as one could look at the bankrupt cases of airlines and car companies to study some recent cases here. Circuit breakers are worth noting as these are cases when trading may be halted because of a big swing in prices that it is believed stopping the market may cause things to settle down."', 'You have to consider a case where you just cannot sell it. Think of it as a bad piece of real estate in Detroit. If there are absolutely no buyers, you cannot sell it (until a buyer shows up)', "For every seller, there's a buyer. Buyers may have any reason for wanting to buy (bargain shopping, foolish belief in a crazy business, etc). The party (brokerage, market maker, individual) owning the stock at the time the company goes out of business is the loser . But in a general panic, not every company is going to go out of business. So the party owning those stocks can expect to recover some, or all, of the value at some point in the future. Brokerages all reserve the right to limit margin trading (required for short selling), and during a panic would likely not allow you to short a stock they feel is a high risk for them."]

UK Tax - can I claim expenses against a different tax year?

["In some circumstances losses from self-employment can be offset against total income and/or capital gains. If this applies to you may be able to claim back some of the tax taken by PAYE from your day job. You can also to some extent carry the loss backwards into previous tax years or forward into the next one if you can't use it fully this year. HMRC have some information available on the current rules: When you can claim losses You can claim: But You can’t claim:"]

Is it possible for an individual to refuse a cheque in France?

["In any country, individuals (and shops) can reject any form of payment that is not Legal Tender - defined by law as a payment form that must be accepted. Shops are typically more generous, because they want to do business with you, but individuals are in a different position. In France, only official coins and bills are declared as Legal Tender (so if they don't want to, individuals don't even need to accept bank transfers). This is for doubts you need to pay. In addition, as you are not forced to do business with them, people and shops can require whatever they feel like to require - if you want to buy their car, they can ask you to stand on your head and spit coins, and if you don't like it, they don't sell to you. (They won't do much business then, probably)"]

How do I estimate my taxes when I have only 1099 income?

['"As long as you paid 100% of your last year\'s tax liability (overall tax liability, the total tax to pay on your 1040) or 90% of the total tax liability this year, or your underpayment is no more than $1000, you won\'t be penalized as long as you pay the difference by April 15th. That\'s per the IRS. I don\'t know where the ""10% of my income"" came from, I\'m not aware of any such rule."', 'So there are a lot of people that get into trouble in your type of self employment situation. This is what I do, and I use google drive so there are no cost for tools. However, having an accounting system is better. Getting in trouble with the IRS really sucks bad.']

Will my current employer find out if I have a sole proprietarship/corporation?

['Tell your employer during your initial contract Terms of Service discussions. Ordinarily, this is boilerplate but you should ask for a rider in your contract which says - in some form - I already have IP, I will continue to work on this IP in my own time, and any benefit or opportunity derived from this IP will continue to be entirely mine. I requested exactly such a rider when I took up a new job just over a year ago and my employer was extremely accommodating. That I already had a company in which that IP could reside actually made the process easier. As @JohnFX has already mentioned, not telling your employer is both unethical as well as storing up potential legal hassles for you in the futre.', "I can see why you'd be reluctant to tell them, but I think you need to be open and honest with them about what you're doing and where you see it going. If the roles were reversed, what would you want your employee to do in this situation? If it were me, I'd be much happier to be told up front than to find out some other way later. If I found out later, I'd feel somewhat betrayed and angry. With the Internet, it seems unlikely that they wouldn't find out eventually, so I think being up front about it is your best option. I also suggest you have a backup plan in case they say no. Perhaps you'd need to find another full-time job that is more tolerant (or even encouraging) of side businesses.", 'I would have thought that if you are doing it in your own time using your own resources it really has nothing to do with your current employer, so there is really no need at all to keep it from them. By being open and transperant you might even get some business from your work mates.', "Some governments offer business information search for corporations in their jurisdiction. The search results may show the director information for the company. If this information is made publicly available, keep in mind there are websites that make money from indexing publicly available information to show in Google search results. I don't mean to scare you as this is a likely a slim possibility. It really depends on the privacy practices in place at the jurisdiction you're in. But do keep in mind if you're planning on doing business on the side for a few years policies may change. I would call Service Ontario (or whichever province you're incorporating in) or Corporations Canada if federally incorporating and ask them if they offer a business search service and exactly what information they make public. You might be able to reach a Privacy Officer and find out what exactly their policy is."]

standard method for learning more about a specific sector? (particularly biotech sector)

['The important piece here is not necessarily understanding intimate details of biological engineering per se, but rather understanding how the business operates as a singular unit. It is also important to understand the business case for a firm, the evolution of demand for its products/services and the cost of its revenue. To understand a particular sector of the market, you should begin by studying how that sector interacts with and is influenced by the larger market and economy as a whole, both domestic and abroad. From there, you should study individual companies and again see how they interact with one another, the sector, market, etc. Many biotech firms have a different offering and meet different business and consumer demands. Some are near term solutions to existing problems, some long. It is important to see how the firms collectively interact with the consumer base and then differentiate on an individual level.']

Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?

['"It\'s a little unusual, but I don\'t think the financial terms are completely unreasonable on their face. What you describe is similar to an interest-only loan, where you make payments that only cover the interest due each month, and the entire principal is due as a single ""balloon payment"" on a specified date (in this case, the date on which the condo is sold). Your monthly payment of $500 on a principal of $115K is equivalent to an annual interest rate of 5.22%, which at least is not completely usurious. With a traditional mortgage you might pay a rate as low as 3%, if you had sufficient income and excellent credit - but I don\'t know, from what you\'ve said, whether that\'s the case. Did you make the current arrangement because you were unable to get a loan from a bank? The main difference here is that instead of the balloon payment being a fixed $115K, it\'s ""75% of the gross proceeds of the sale"". If the condo eventually sells for $155K, that would be $116,250, so that\'s slightly advantageous to them (assuming that ""gross proceeds"" means ""before deducting commissions for either the buyers\' or sellers\' realtors or any other costs of the sale""), and thus slightly disadvantageous to you. If the condo appreciates in value, that\'s more of a win for them and more of a relative loss for you. But it\'s also possible that the value of the condo goes down, in which case this arrangement is better for you than a fixed balloon payment. So this deal does prevent you from getting a larger share of any gains in the value of the property, but it also helps insulate you from any losses. That\'s important to keep in mind. There\'s also the issue of needing their consent to sell. That\'s potentially problematic - usually in a joint ownership scheme, either owner has the right to demand to be bought out or to force a sale. I guess it depends on whether you think your parents would be likely to consent under reasonable circumstances, or to insist on holding the property against your best interests. It\'s true that you aren\'t building equity with this arrangement, and if you thought you were, you are mistaken or misled. But let\'s compare it with other options. If you would qualify for a traditional 30-year fixed mortgage at 3%, your monthly payment would be slightly lower ($484), and you would be building some equity because your payments would reduce the principal as well as paying the interest. But a 30-year loan builds equity very slowly at first - after 7 years you\'d have only about $20,000 in principal paid down. If we assume that 5.2% represents the interest rate you\'d otherwise pay based on your creditworthiness, then your monthly payment would be $631. So compared to that, you have an extra $130 per month that you can save or invest in whatever you want - you\'re not forced to invest it in your house. Note that in either case you\'d still be paying the condo fees, property taxes, insurance, and maintenance yourself. So we might as well eliminate those from consideration. It might be a good idea to find out what other options you would have - perhaps try to get an interest rate quote on a traditional mortgage from a bank, based on your income and credit history. Then you can decide what to do, taking into account: your financial situation; how much of a monthly payment could you afford? your relationship with your parents; are they likely to be reasonable about renegotiating? Do they in general tend to respect your wishes? Would it harm your relationship if you tried to get out of the deal, and how important is that to you? To what extent do you actually want to pay for equity in this property? Do you really believe it\'s a good investment, and have evidence to support that? Your options include: Try to renegotiate the terms of the loan from your parents Try to ""refinance"" the loan, by getting a loan from a bank and paying off some agreed-upon amount of principal to your parents Try to force the sale of the condo and move to another house, financing it some other way Consult a lawyer as to whether your agreement with your parents is legally enforceable. For instance, do they have a lien on the property?"', "Ripped off may be too strong as it implies intent - I'm hopeful it's just bad logic or terminology. I would say better agreements would be: Borrowing money from family/friends is always risky. If you and your parents are comfortable with the situation and can reliably keep records of how much is owed at any given time (and how much of the $500/mo is interest) then the loan might be a good option. If not, and your parents don't need the income stream from the loan, then I would recommend the second option since it's much cleaner. In any case, make sure everything is in writing and the proper legal procedures are followed (just as if you had borrowed the money from a bank). That means either filing a mortgage with the county for option 1 or having both parties on the deed, and having the ownership percentages in writing.", '"To expand on what @fishinear and some others are saying: The only way to look at it is that the parents have invested, because the parents get a % of the property in the end, rather than the original loan amount plus interest. It is investment; it is not a loan of any kind. One way to understand this is to imagine that after 20 years, the property triples in value (or halves in value). The parents participate as if they had invested in 75% ownership of the property and the OP as if 25% ownership of the property. Note that with a loan, there is a (potentially changing) outstanding loan balance, that could be paid to end the loan (to pay off the loan), and there is an agreed upon an interest rate that is computed on the outstanding balance — none of those apply to this situation; further with a loan there is no % of the property: though the property may be used to secure the loan, that isn\'t ownership. Basically, since the situation bears none of the qualities of a loan, and yet does bear the qualities of investment, the parents have bought a % ownership of the property. The parents have invested in 75% of the real estate, and the OP is renting that 75% from them for: The total rent the OP is paying the parents for their 75% of the property is then (at least) $1012.50/mo, A rental rate of $1012.50/mo for 75% of the property equates to a rental price of $1350/mo for the whole property. This arrangement is only fair to both parties when the fair-market rental value of the whole property is $1350/mo; it is unfair to the OP when the fair-market rental value of property is less, and unfair to the parents when the fair-market rental value of property is more. Of course, the fair-market rental value of the property is variable over time, so the overall fairness would need to understand rental values over time. I feel like this isn\'t actually a loan if I can never build more equity in the condo. Am I missing something? No, it isn\'t a loan. You and your parents are co-investing in real estate. Further, you are renting their portion of the investment from them. For comparison, with a loan you have 100% ownership in the property from the start, so you, the owner, would see all the upside/downside as the property valuation changes over time whether the loan is paid off or not. The borrower owes the loan balance (and interest) not some % of the property. A loan may be secured by the property (using a lien) but that is quite different from ownership. Typically, a loan has a payment schedule setup to reduce the loan balance (steadily) over time so that you eventually pay it off. With a loan you gain equity % — the amount you own outright, free & clear — in two ways, (1) by gradually paying off the loan over time so the unencumbered portion of the property grows, and (2) if the valuation of the property increases over time that gain in equity % is yours (not the lenders). However note that the legal ownership is all 100% yours from the start. Are my parents ripping me off with this deal that doesn\'t allow me to build my equity in my home? You can evaluate whether you are being ripped off by comparing the $1350/mo rate to the potential rental rate for the property over time (which will be a range or curve, and there are real estate websites (like zillow.com or redfin.com, others) to help estimate what fair-market rent might be). Are there similar deals like this...? A straight-forward loan would have the borrower with 100% legal ownership from the start, just that the property secures the loan. Whereas with co-investment there is a division of ownership % that is fixed from the start. It is unusual to have both investment and loan at the same time where they are setup for gradual change between them. (Investment and loan can certainly be done together but would usually be done as completely separate contracts, one loan, one investment with no adjustment between the two over time.) To do both investment and loan would be unusual but certainly be possible, I would imagine; however that is not the case here as being described. I am not familiar with contracts that do both so as to take over the equity/ownership/investment over time while also reducing loan balance. Perhaps some forms of rent-to-own work that way, something to look into — still, usually rent-to-own means that until the renter owns it 100%, the landlord owns 100%, rather than a gradual % transfer over time (gradual transfer would imply co-ownership for a long time, something that most landlords would be reluctant to do). Transfer of any particular % of real estate ownership typically requires filing documents with the county and may incur fees. I am not aware of counties that allow gradual % transfer with one single filing. Still, the courts may honor a contract that does such gradual transfer outside of county filings. If so, what should I do? Explain the situation to your parents, and, in particular, however far out of balance the rental rate may be. Decide for yourself if you want to rent vs. buy, and where (that property or some other). If your parents are fair people, they should be open to negotiation. If not, you might need a lawyer. I suspect that a lawyer would be able to find several issues with which to challenge the contract. The other terms are important as well, namely gross vs. net proceeds (as others point out) because selling a property costs a % to real estate agents and possibly some taxes as well. And as the others have pointed out, if the property ultimately looses value, that could be factored in as well. It is immaterial to judging the fairness of this particular situation whether getting a bank loan would be preferable to renting 75% from the parents. Further, loan interest rates don\'t factor into the fairness of this rental situation (but of course interest rates do factor into identifying the better of various methods of investment and methods of securing a place to live, e.g. rent vs. buy). Contributed by @Scott: If your parents view this as an investment arrangement as described, then you need to clarify with them if the payments being made to them are considered a ""buy out"" of their share. This would allow you to gain the equity you seek from the arrangement. @Scott: Terms would have to be (or have been) declared to that effect; this would involve specifying some schedule and/or rates. It would have to be negotiated; this it is not something that could go assumed or unstated. -- Erik"', 'First, this was never an arrangement for you to build equity, this was an arrangement for them to speculate on another house under the guise of teaching you a life lesson like responsibility or something contrived. The only way you profit from this is if the value of the house goes up and you sell it. You get 25% of the proceeds, maybe. If this was an equitable arrangement then they would be paying 75% of the property taxes and a little more for your maintenance efforts.', "You are getting totally hosed mate. Assume you live in the house for ten years, can get a normal 30 year mortgage and house prices average at 3% annually You could get a mortgage at 3.8% so your monthly payment would be $560 a month. $60 a month difference over 10 year is $7200 Because you are paying down on a conventional mortgage you would owe 93500 after 10 years. On top of that the house would have appreciated by $47000. You would have to give you parents $35500 of that. So by avoiding a normal loan it's costing you an extra $49000.", '"If I understand you situation correctly, then the accepted answer is extremely misleading and incorrect. Your arrangement with your parents is definitely unreasonable. It is definitely not ""similar to an interest-only loan"". In an interest-only loan, like you can get from a bank, you will loan a sum of money, which you are expected to pay back at a certain time in the future, or when you sell the condo. But you pay back the original sum, not the value of property at selling time. For the access to the money you pay an interest to the bank. The bank gets their profits from the interest. The property only serves as collateral in case you are not able to make your interest payments. Another way to view it, is that your parent bought (a share of) your condo for investment reasons. In that case, they would expect to get their profits from the increase of the value of the property over time. That looks most like your situation. Granted, that is more risky for them, but that is what they choose to sign up for. But in that case it is not reasonable to charge your for interest as well, because that would mean they would get double profits. So how does the $500 monthly payment fit in? If it is interest, then it would work out to a yearly interest of about 5.2%. Where I live, that would nowadays be extremely high even for an interest-only mortgage from a bank. But I don\'t live in the USA, so don\'t know whether that is true there. I think in your situation, the $500 can only be seen as rent. Whether that is reasonable for your situation I cannot judge from here. It should be 75% of a reasonable rent for a condo like that. But in that case, your parents should also stand for 75% of the maintenance costs of the property, which you don\'t mention, and most of the property taxes and insurance fees. In short, no it is not a reasonable arrangement. You would be better of trying to get a morgage from the bank, and buy out your parents with it."', "Yes, you are getting shafted. In the end, you will have paid the full price of the condo, but still own only 25% of it. Your parents' stake in the home should decrease as you repay the loan. The way it is now, they're getting 75% of your condo for free!", "Talk to your parents, and find out if you are reducing the debt or not. Find buyers, sell the place now and get out the deal. Of course you will have to wait to get a good price on it. Short term you haven't lost that much, but long term you will. Take your 25%, and use it as a down payment on a regular bank mortgage. Lesson learned move on.", "First, I don't think your parents are ripping you off, but you should get your agreement in writing. The fact that you never own more than 25% doesn't matter. If the condo's value is increasing, you are in fact building equity. Your share of the equity just doesn't increase, but it doesn't decrease either. For example, if the condo is worth $300,000 now, you have $75,000 in equity. Of course if the value is decreasing, so is your equity. If you are paying $500/month in interest (as OP clarified above), and you don't have a written agreement, you are probably unable to claim that payment as mortgage interest if you itemize your deductions on U.S. federal or state tax returns, thus you may be losing out on a legal tax deduction (assuming you earn enough to itemize). They will need to give you each year the proper IRS form for mortgage interest (Form 1098). And, they have to claim the $500/month as interest income on their tax returns. Having a written and signed contract eliminates confusion and potential for heartbreaking misunderstanding the future--and it sounds like you are already experiencing some doubt and confusion now. Your rate seems within market rates for an interest-only loan. Let's say you wanted to buy out your parents' share of the condo right now. Would you pay $115,000 or would you have to get an appraisal to find out what the condo is worth now? If you can't answer that question, you need to get that in writing so that you won't have an argument over it someday. If the condo has appreciated significantly and all you have to pay is the $115,000, then that's a sweet deal for you, because you'd be buying out a much more valuable property for much less than it's worth. If that is the agreement, and the property is appreciating (no guarantee, especially with condos), then you are essentially building equity. If the property is declining in value and you do wish to sell it, then you won't have to pay $115,000; they'll just end up with their 75% share, which will be less than the $115K they invested. Both of you would lose some of your investment, but you would have had all the benefits of living in a nice condo all those years and they wouldn't. They are definitely taking more risk than you are. Second, if you had $40,000 cash saved up, your parents probably raised you with some good financial sense and work ethic, so I'm optimistic they have good intentions for your future. Operate from that frame of mind when you go to ask for a written agreement. Next, read up about Equity Share Agreements. There are many models that will help inform your decisions. But, you should engage a real estate lawyer to help you draw up a fair agreement for both parties. I was in an equity share agreement for my first townhouse. It's a common practice, and it won't cost all that much to get one created. It's worth the money to get it done properly.", "No It's not a loan. It's an equity investment. Think of it as a business. The parents bought 75% of the equity with $115K, and are entitled to 75% of the sale proceeds, should you someday liquidate the business (i.e. selling the house). The $500 per month is just business revenue and is paid to your parents as a dividend. Imagine you rent it out to your self and charge a $666.66 rent - you take 25% of that back and give your parents the rest. Like any equity investment, the risk for them is that if the value of the house goes down, they will have to shoulder the loss. And you are right, there is no way to build equity. You already sold that to your parents.", "Actually if you look at a loan for $115,000 over 30 years at current interest rates you would have a payment of about $500 a month. I would argue your $500 monthly payments are building equity the same way a loan repayment schedule would. Is your agreement in writing? If it is, there's nothing you can do unless they agree. If it's not then write up a contract for a $115k loan that you will pay back over 30 years at $500 a month with the amortization table. That will show how much equity you're building over time. (It's not much the first 10 years!) Note that some states require real estate contract to be in writing or else they are voidable by either party. Whatever you do, get something in writing or you'll probably either end up in court or feeling bitter for the next few decades.", "The time to have looked into this is before you bought the condo, not now. You are presumably an adult. Your parents have apparently made it possible for you to have a roof of your own over your head for what is probably below rental rates (but I don't know your area, so can't say). From their point of view, they may have been doing you a favor, while giving themselves an investment opportunity. What would they be doing with that money otherwise, and at a higher or lower rate of return, and with greater or lesser risk? Where and how would you be living otherwise? More Importantly, if you can't talk to them about this you have bigger problems than money.", '"Basically, you have purchased 25% of the condo for $40,000, and your parents bought 75% of the condo for another $115,000. We imagine for a moment that it wasn\'t you who lived in the condo, but some unrelated person paying rent. You are paying $7,500 a year for tax and fees, plus $6,000 a year, so there is $13,500 leaving your wallet. If $15,500 a year was a reasonable rent, then the tax and fee would be paid out of that, there would be $8,000 left, of which you would get 25% = $2,000. If you were officially ""renting"" it, you would pay $15,500 a year, and get $2,000 back, again $13,500 leaving your wallet. So you are in exact the same situation financially as you would be if you paid $15,500 rent. Question: Is $15,500 a year or $1,290 a month an appropriate rent for your condo? If a neighbour is renting his condo, is he or she paying $1,290 or more or less? Could you rent the same place for the same money? If $1,290 is the correct rent then you are fine. If the rent should be lower, then you are overpaying. If the rent should be higher, then you are making money. Keep in mind that you will also be winning if rents go up in the future."', "Are you in the United States? Is there some sort of written agreement that the money your parents paid into the house is a loan that will be paid back? I assume the deed to the home is in your name, and your parents do not have a lien on the property in any way? In the United States provided there is no lien and your parents are not also on the mortgage, that home is 100% yours. Now I would argue you still owe your parents money, but absent some sort of contract it sounds like an interest free loan that you'll pay back at a rate of 500$/month. Your parents could attempt to sue you and if this happens I recommend you find a real estate attorney. It's unlikely that they would win the case since there's no paperwork and even if there was it is unlikely to hold up since it so strongly favors them ( your parents ). Now if your parents are listed on the mortgage or somehow have a lien on the house, you have a bigger issue as they technically own (or at least have an interest in) part of the property and when you decide to sell the house you would have to involve them.", 'yes and no its definitely not charitable as they are making money of off you but depending on the outside conditions if you had to pay a mortgage on that condo with only 35k in payments to start off it would more than likely exceed 500 dollars a month however there would always be a point were the mortgage would end and it dosent sound like thats going to be the case with you paying your parents so it depends on how long your going to have that condo and how much mortgage would have been.', "I would go see a Lawyer no matter what. It's a form of a scam your parents are doing. Make sure it's YOUR name only on the title of the building if it is, then you have a MAJOR case against them. This is a form of Equity scam, in where you aren't really going to make hardly any money. Once you pay them that money towards the loan legally their stake needs to decrease according to what you said. ABSOLUTELY CONSULT A LAWYER!", "You're paying 5.2% 'interest' on the $115K (500 * 12 / 115,000) * 100 but the amount you pay back is not $115K but 75% of the property value at sale. Is that right? A mortgage would have cost about half that rate and the balloon payment would have been fixed - you would pay back $115K at maturity plus you could have sold it whenever you liked As Gnasher729 said, if you consider it to be rent then the situation looks different but the point of buying a house is to avoid paying 'useless' rent, build equity and hopefully make a capital gain I'd speak to a lawyer & possibly an accountant (regarding the numbers)", "It depends on the selling price, but if we can assume the property will be sold at a profit, they are getting a pretty sweet deal at your expense. They are both getting about 5.2% interest on their money, plus the lion's share of any property appreciation. I would say that fair would be either of:", 'You are being ripped off on several counts. 1) 40k is 26% not 25%. 2) Why should you pay them $500 rent? they bought a share of the property, they should fund it if they intend to keep 75% 3) Why do you need to pay them for the 75%? why dont they need to pay you for the 25%? You are better off getting a loan for the 75% and going solo so you get to buy equity.']

What should I consider when factoring fluctuating exchange rates into risk/return of overseas stock trading?

['Which of these two factors is likely to be more significant? There is long term trend that puts one favourable with other. .... I realise that I could just as easily have lost 5% on the LSE and made 5% back on the currency, leaving me with my original investment minus various fees; or to have lost 5% on both. Yes that is true. Either of the 3 scenarios are possible. Those issues aside, am I looking at this in remotely the right way? Yes. You are looking at it the right way. Generally one invests in Foreign markets for;']

How Do Scammers / Money Launderers Profit From Loans To Victims

['"What was the true reason they wanted to use my accounts for? We wouldn\'t know the true reason. The scammer can do multiple things. What exactly he would do in your case ... I am very eager to know what a person was up to who would give to me so much information about themselves. I know some of you will jump on the chance to yell ""it was not their true address"", but.... it is where they wanted me to send the cards to. And I was to give proof of my identification ie; a copy of my drivers license, my articles of incorporation and the real estate development project prospectus. Also they were only willing to work with certain banks ie; Citibank, Bank of America etc. I can not understand what they were doing wanting such access to accounts that had no money in them save the amount I used to open them with. It looks more like they would open accounts under your name, but they would be controlling the accounts. i.e. what goes in and out. i.e. they would be able to deposit and withdraw from a new account they set-up. They would want to use this account for illegal activities, so that if caught, the account opening paper trail leads to you. Even if they gave you an address, it could be rental. Like they have copies of your Company registration and ID proofs, they can use these to get another rental property ... and then send letters to some and ask them to met there."', "If they have your account numbers (which are necessary for direct deposits) they could possibly initiate ACH withdrawals from your accounts too (requires some setup but they may have accomplices). Note that even if you didn't have money there, depending on the local bank rules you may be still on the hook for overdrafts they create, at least by default. You may be able to prove later that this was fraud but the burden of proof will be on you, and in the meantime they might be gone with the money. They could use your documents to either establish other accounts in your name (identity theft) or take over your accounts (e.g. by contacting customer service of the bank and claiming to be you, and presenting the documents you sent as a proof), request credits under your identity (possibly using the money on the account as a collateral since the bank may not know where the money is from), etc. This is even easier given you will give them all the documents and information needed for a loan, your signature, etc. And the fact that they ask you to send documents to a specific address doesn't mean they could be found at that address when the problems start - it may be rented short-term, belong to either knowing or unknowing accomplice, be a forwarding service, etc. Could be money laundering of course too. That's just what comes to mind after a short while thinking about it."]

Health Insurance and Disability Question

["Sorry to hear about your spouse's health issues. May he have a speedy and, as far as possible, full recovery. The Patient Protectection and Affordable Care Act (PPACA, aka Obamacare) is now the law of the land. Among its many provisions are that insurers may no longer deny coverage for pre-existing conditions, they may not put lifetime caps on benefits, and they may not charge different premiums based on any criteria except age cohort and geographic area (i.e. rates may be higher for 50 year olds than 30 year olds, but sick and healthy 50 year olds living in the same area pay the same). If he gets government health coverage because he's on disability, this may not matter. On the other hand, you might find it better to put him on your employer's policy, because you like the coverage better, the employer covers part of the dependent premium, or some other reason. In any case, they can't discriminate against him or you based on his condition. ETA: Rates may vary by geography as well as age."]

Optimal number of credit cards for a given length of credit history

["I have found that between the Discover card and a Visa/Master Card a person has everything covered. In my case the Discover card had the best deal (cash back) and the Visa/Master Card took care of those times a vendor didn't take Discover. One big Box store (Costco) did trip us up, so we did end up getting an American Express card. But Costco is dropping that requirement in 2016. One advantage of only having a few cards is that the increase in your total credit line will be split among fewer cards. In your question the highest max limit on one card is $2500, what will you do if you have to take a flight at the last minute and the Airline ticket is more than that? If you need a higher limit, ask for one of your existing cards to raise it; don't go out and get another card. If you see that one of the companies that you already have a card with has a better card, you can ask them to convert your account to that better card. Yes higher total limit does help your utilization ratio portion of the score. But there is some opinion that they also look at the utilization ratio per card. So hitting one card to nearly the max can hurt your score. Three caveats about the number of cards:"]

How Long Can It Take For a Check I Write to Clear on My Account?

['"There\'s nothing you can do. If he has indeed deposited the check, it would appear on your account fairly quickly - I\'ve never seen it taking more than 2-3 business days. However, a check is a debt instrument, and you cannot close the account until it clears, or until the ""unclaimed property"" laws of your state kick in. If he claims that he deposited the check, ask it in writing and have your bank (or the bank where it was deposited) investigate why it takes so long to clear. If he\'s not willing to give it to you in writing - he\'s likely not deposited it. Whatever the reason may be, even just to cause you nuisance. Lesson learned. Next time - cashier\'s check with a signed receipt. Re closing the LLC: if you\'re the only two partners - you can just withdraw yourself from the LLC, take out your share, and drop it on him leaving him the only partner. Check with your local attorney for details."', "According to this Q&A by a Houston law professor: The law, however, is not designed to interfere with an individual's right to stop payment on a valid check because of a dispute with someone. If he didn't deliver as promised, you do not owe the money and have the right to stop payment. Assuming that you had enough money in the bank to cover the check, stopping payment is not a crime. I found several other pages essentially saying the same thing. All the usual disclaimers apply, I am not a lawyer, this is not legal advice, etc. In particular, laws might vary by state. Basically, though, it doesn't seem there's any reason why you can't stop payment on the check just because you feel like it. If you then provide a cashier's check for the payment, your ex-partner will not really have anything to complain about. If you're worried about annoying him by doing this, that's a separate issue, but given the situation you describe, I don't see why you should be. If you feel he is being a pain in the neck, feel free to be a pain in the neck right back and force him to accept the payment in the manner you decide, instead of allowing him to string you along. Note two things: obviously if you have reason to believe the guy will sue you, you should act with caution. Also, I'm not suggesting withdrawing payment completely, only stopping the check and issuing a new payment that you don't have to wait on (e.g., cashier's check)."]

How to send money from europe to usa EUR - USD?

["The website http://currencyfair.com/ provides a service which gives you both a decent exchange rate (about 1% off from mid-market rate) and a moderately low fee for the transfer: 4 USD for outgoing ACH in the US, 10 USD for same-day US wire. For the reverse (sending money from the US to EU) the fees are: 3 EUR for an ACH, 8 EUR for a same-day EUR wire. It has been online for quite a while, so I assume its legit, but I'd do a transfer for a smaller sum first, to see if there are any problems, and then a second transfer for the whole sum.", 'PayPal. Or even Western Union or MoneyGram. Despite their fees, there is a reason those companies are still in business.']

Good book-keeping software?

['You can try Wave Accounting. Its a free software for Small Business and web-based. http://waveaccounting.com/', "The short answer is that there are no great personal finance programs out there any more. In the past, I found Microsoft Money to be slick and feature rich but unfortunately it has been discontinued a few years ago. Your choices now are Quicken and Mint along with the several open-source programs that have been listed by others. In the past, I found the open source programs to be both clunky and not feature-complete for my every day use. It's possible they have improved significantly since I had last looked at them. The biggest limitation I saw with them is weakness of integration with financial service providers (banks, credit card companies, brokerage accounts, etc.) Let's start with Mint. Mint is a web-based tool (owned by the same company as Quicken) whose main feature is its ability to connect to nearly every financial institution you're likely to use. Mint aggregates that data for you and presents it on the homepage. This makes it very easy to see your net worth and changes to it over time, spending trends, track your progress on budgets and long-term goals, etc. Mint allows you to do all of this with little or no data entry. It has support for your investments but does not allow for deep analysis of them. Quicken is a desktop program. It is extremely feature rich in terms of supporting different types of accounts, transactions, reports, reconciliation, etc. One could use Quicken to do everything that I just described about Mint, but the power of Quicken is in its more manual features. For example, while Mint is centred on showing you your status, Quicken allows you to enter transactions in real-time (as you're writing a check, initiating a transfer, etc) and later reconciles them with data from your financial institutions. Link Mint, Quicken has good integration with financial companies so you can generally get away with as little or as much data entry as you want. For example, you can manually enter large checks and transfers (and later match to automatically-downloaded data) but allow small entries like credit card purchases to download automatically. Bottom line, if you're just looking to keep track of where you are at, try Mint. It's very simple and free. If you need more power and want to manage your finances on a more transactional level, try Quicken (though I believe they do not have a trial version, I don't understand why). The learning curve is steep although probably gentler than that of GnuCash. Last note on why Mint.com is free: it's the usual ad-supported model, plus Mint sells aggregated consumer behaviour reports to other institutions (since Mint has everyone's transactions, it can identify consumer trends). If you're not comfortable with that, or with the idea of giving a website passwords to all your financial accounts, you will find Quicken easier to accept. Hope this helps.", "I like Quicken for personal use, and they have a small business edition if you don't want to move into QuickBooks.", 'Best Linux software is PostBooks. It is full double entry, but there is definitely a learning curve. For platform-agnostic, my favorite is Xero, which is web-based. It is full double entry balance sheet, the bank reconciliation is a pleasure to use, and they are coming out with a US version this summer. Easy to use and does everything I need.', 'I like using Mint.com to track my expenses. It makes it very easy to watch my budget and monitor my spending.', 'I think Peachtree is a double entry system', '"Xero and WaveAccounting can make things easy, but they also have their limitations. I\'ve used both for short periods of time but found both of them to be lacking. While the ""ease"" is appealing, the ability to drill into the details and get good reports is the downfall of both of these accounting systems. QuickBooks may seem like the easy answer here, but it really is the best for getting the power you want without getting too complicated."', "You should consider Turbocash. It's a mature open-source project, installed locally (thick client).", "I'm not directly affiliated with the company (I work for one of the add-on partners) but I can wholeheartedly recommend Xero for both personal and business finances. Their basis is to make accounting simple and clean, without sacrificing any of the power behind having the figures there in the first place.", 'You can try manager.io. It has a desktop, cloud and server edition that should fit your needs.']

Do I have to pay taxes on income from my website or profits?

["I am not an accountant, but I do run a business in the UK and my understanding is that it's a threshold thing, which I believe is £2,500. Assuming you don't currently have to submit self assessment, and your additional income from all sources other than employment (for which you already pay tax) is less than £2,500, you don't have to declare it. Above this level you have to submit self assessment. More information can be found here I also find that HMRC are quite helpful - give them a call and ask.", 'Not sure about the UK, but if it were in the US you need to realize the expenses can be claimed as much as the income. After having a mild heart attack when I did my business taxes the first time many years ago, a Small Business Administration adviser pointed it out. You are running the site from a computer? Deductible on an amortization schedule. Do you work from home? Electricity can be deducted. Do you drive at all? Did you pay yourself a wage? Any paperwork, fax communications, bank fees that you had to endure as work expenses? I am not an accountant, but chances are you legally lost quite a bit more than you made in a new web venture. Discuss it with an accountant for the details and more importantly the laws in your country. I could be off my rocker.', '"Income is income... it depends how it\'s structured.. personal or corporate.. but still you need to pay taxes... if you get audited, the tax man could look at your bank statements and ask, ""where is this money coming from"""', "You need to set your status as self-employed the day you started online work. If that date is a little ambiguous (as is usually the case with online business), you can start with the day you first made any money. Yes, you can deduct expenses from your revenue. But you have to be sure that the expenses were purely business related. This is how it goes: You inform HMRC about the day you started work. HMRC will assign you a UTR (Unique Tax Reference) number. Depending on how much you make you might or might not need to pay Class 2 NI contributions. You'll need to tell HMRC how much you expect to earn in the current tax year. Finally, you'll need to complete a Self-Assessment at the end of the tax year. I highly recommend setting up a business banking account. Here is a link that discusses being part-time self-employed in the UK.", 'Being a tax professional, my understanding is that the threshold limit is a single limit for all your source(s) of income. Now many people who already draw salary which is liable to tax, develop application for mobile and generate some income. Such income is liable to tax, if along with other income they exceed the threshold limit. Income will have surely related expenses. And the expenses which are related to earning of the income are allowed to be deducted.']

Is it better to ask for a raise before a spin-off / merger or after?

["I would guess that before the spin-off, more money would be available In my experience the reverse is true. The finance folks go into overdrive tightening everything up so that budget forecasts for the transition period are as accurate and predictable as possible. This can be true 6 months out, 12 months out, etc - depending on the size and complexity of the business. So in terms of when to renegotiate, I think approaching the issue after the dust has settled is more realistic. Make sure you know your numbers as per normal and just remember that after the spin-off has occurred it's a business like any other business: if you are in position to negotiate (and reasonably expect) a raise then the fact that they spun off recently - a month or two before - is meaningless to the negotiation.", "gef05 hit it on the head -- the books get frozen when mergers/spinoffs happen. I worked as an IT guy at a company whose mission was operating call centers -- and they didn't bother paying the phone bill! Why? the terms were already agreed upon, and the powers that be were waiting for final legal sign-off. Try to figure out who the leaders are going to be after the spinoff, and start politicking them.", '"Corporate restructuring makes everything a flux, so you might as well revisit some core fundamental questions. Here\'s how to do this professionally: Start floating your CV now. Line up interviews in competing companies. Attend to them. Score a job offer, and have it put into writing, with exact salary, which should be at least 10%++ of your current one. Take a clear empty page, and write on top: ""Business value provided"". Put down your major contributions, and achievements. Wherever possible, put the company\'s expected dollar value near to it. For bonus points, sum it up on the bottom, and minus your current salary. Difference is ""Profit provided directly to the company\'s bottom line"". Float this to your manager\'s desk. At this position, you have only one fundamental question to your boss: ""match or pass?"" :) A corporate spin-off is a good time to do this: 1, to ensure, that your position will not be made redundant; 2, if it is, you have a backup plan. If the parent company\'s ""getting rid of you"", however, there are even more fundamental questions you might want to ask yourself: is this really a profitable division, or merely a loss leader? Does this company have a future, and the adequate growing options for you, personally? To answer these questions, you must have an opportunity cost estimation; and for that, you must have second (and preferably, third) options -hence, the strategy above. To conclude, the best time to do your job research is every other month; and the best time to ask for a raise is always now :) Good luck!"']

Why do people always talk about stocks that pay high dividends?

['"It has little to do with money or finance. It\'s basic neuroscience. When we get money, our brains release dopamine (read Your Money and Your Brain), and receiving dividends is ""getting money."" It feels good, so we\'re more likely to do it again. What you often see are rationalizations because the above explanation sounds ... irrational, so many people want to make their behavior look more rational. Ceteris paribus a solid growth stock is as good as a solid company that pays dividends. In value-investing terms, dividend paying stocks may appear to give you an advantage in that you can keep the dividends in cash and buy when the price of the security is low (""underpriced""). However, as you realize, you could just sell the growth stock at certain prices and the effect would be the same, assuming you\'re using a free brokerage like Robin Hood. You can easily sell just a portion of the shares periodically to get a ""stream of cash"" like dividends. That presents no problem whatsoever, so this cannot be the explanation to why some people think it is ""smart"" to be a dividend investor. Yes, if you\'re using a brokerage like Robin Hood (there may be others, but I think this is the only one right now), then you are right on."', "When you invest in stocks, there are two possible ways to make money: Many people speculate just on the stock price, which would result in a gain (or loss), but only once you have resold the shares. Others don't really care about the stock price. They get dividends every so often, and hopefully, the return will be better than other types of investments. If you're in there for the long run, you do not really care what the price of the stock is. It is often highly volatile, and often completely disconnected from anything, so it's not because today you have a theoretical gain (because the current stock price is higher than your buying price) that you will effectively realise that gain when you sell (need I enumerate the numerous crashes that prevented this from happening?). Returns will often be more spectacular on share resale than on dividends, but it goes both ways (you can lose a lot if you resell at the wrong time). Dividends tend to be a bit more stable, and unless the company goes bankrupt (or a few other unfortunate events), you still hold shares in the company even if the price goes down, and you could still get dividends. And you can still resell the stock on top of that! Of course, not all companies distribute dividends. In that case, you only have the hope of reselling at a higher price (or that the company will distribute dividends in the future). Welcome to the next bubble...", "If you assume the market is always 100% rational and accurate and liquid, then it doesn't matter very much if a company pays dividends, other than how dividends are taxed vs. capital gains. (If the market is 100% accurate and liquid, it also doesn't really matter what stock you buy, since they are all fairly priced, other than that you want the stock to match your risk tolerance). However, if you manage to find an undervalued company (which, as an investor, is what you are trying to do), your investment skill won't pay off much until enough other people notice the company's value, which might take a long time, and you might end up wanting to sell before it happens. But if the company pays dividends, you can, slowly, get value from your investment no matter what the market thinks. (Of course, if it's really undervalued then you would often, but not always, want to buy more of it anyway). Also, companies must constantly decide whether to reinvest the money in themselves or pay out dividends to owners. As an owner, there are some cases in which you would prefer the company invest in itself, because you think they can do better with it then you can. However, there is a decided tendency for C level employees to be more optimistic in this regard than their owners (perhaps because even sub-market quality investments expand the empires of the executives, even when they hurt the owners). Paying dividends is thus sometimes a sign that a company no longer has capital requirements intense enough that it makes sense to re-invest all of its profits (though having that much opportunity can be a good thing, sometimes), and/or a sign that it is willing, to some degree, to favor paying its owners over expanding the business. As a current or prospective owner, that can be desirable. It's also worth mentioning that, since stocks paying dividends are likely not in the middle of a fast growth phase and are producing profit in excess of their capital needs, they are likely slower growth and lower risk as a class than companies without dividends. This puts them in a particular place on the risk/reward spectrum, so some investors may prefer dividend paying stocks because they match their risk profile.", 'The answer, for me, has to do with compounding. That drop in price post-ex-div is not compounded. But if you reinvest your dividends back into the stock then you buy on those post-ex-div dips in price and your money is compounded because those shares you just bought will, themselves, yeald dividends next quarter. Also, with my broker, I reinvest the dividend incurring no commission. My broker has a feature to reinvest dividends automatically and he charges no commission on those buys. Edit:I forgot to mention that you do not incurr the loss from a drop in price until you sell the security. If you do not sell post-ex-div then you have no loss. As long as the dividend remains the same (or increases) then the theoretical ROI on that security goes up. The drop in price is actually to your benefit because you are able to acquire more shares with the money you just received in the dividend So the price coming down post-ex-div is a good thing (if you buy and hold).', '"Dividends telegraph that management has a longer term focus than just the end of quarter share price. There is a committment to at least maintain (if not periodically increase) the dividend payout year over year. Management understands that cutting or pausing dividends will cause dividend investors in market to dump shares driving down the stock price. Dividends can have preferential tax treatment in some jurisdictions, either for an individual compared to capital gains or compared to the corporation paying taxes themselves. For example, REITs (real estate investment trusts) are a type of corporation that in order to not pay corporate income tax are required to pay out 95% of income as dividends each year. These are not the only type, MLP (master limited partnerships) and other ""Partnership"" structures will always have high dividend rates by design. Dividends provide cash flow and trade market volatility for actual cash. Not every investor needs cash flow, but for certain investors, it reduces the risks of a liquidity crisis, such as in retirement. The alternative for an investor who seeks to use the sale of shares would be to maintain a sufficient cash reserve for typical market recessions."', '"Isn\'t it true that on the ex-dividend date, the price of the stock goes down roughly the amount of the dividend? That is, what you gain in dividend, you lose in price drop. Yes and No. It Depends! Generally stocks move up and down during the market, and become more volatile on some news. So One can\'t truly measure if the stock has gone down by the extent of dividend as one cannot isolate other factors for what is a normal share movement. There are time when the prices infact moves up. Now would it have moved more if there was no dividend is speculative. Secondly the dividends are very small percentage compared to the shares trading price. Generally even if 100% dividend are announced, they are on the share capital. On share prices dividends would be less than 1%. Hence it becomes more difficult to measure the movement of stock. Note if the dividend is greater than a said percentage, there are rules that give guidelines to factor this in options and other area etc. Lets not mix these exceptions. Why is everyone making a big deal out of the amount that companies pay in dividends then? Why do some people call themselves ""dividend investors""? It doesn\'t seem to make much sense. There are some set of investors who are passive. i.e. they want to invest in good stock, but don\'t want to sell it; i.e. more like keep it for long time. At the same time they want some cash potentially to spend; similar to interest received on Bank Deposits. This class of share holders, it makes sense to invest into companies that give dividends, as year on year they keep receiving some money. If they on the other hand has invested into a company that does not give dividends, they would have to sell some units to get the same money back. This is the catch. They have to sell in whole units, there is brokerage, fees, etc, there are tax events. Some countries have taxes that are more friendly to dividends than capital gains. Thus its an individual choice whether to invest into companies that give good dividends or into companies that don\'t give dividends. Giving or not giving dividends does not make a company good or bad."', "Technically, the difference between dividends and growth ought to be that dividends can be reinvested in stocks other than the one that paid them, which is a definite advantage if you actually have a strategy. Dividend -paying stocks used to be preferred for exactly that reason, back in the days when fewer people were directly playing in the market and more knew what they were doing. Unfortunately, getting a periodic dividend from a stock whose price is relatively steady isn't as exciting a game as watching your stock's value bounce around and (hopefully) creep upward on a second-by-second basis. Those who are thinking in gambling terms rather than investment terms -- or who think they can beat the pros at high frequency trading, comment withheld -- want the latter, and have been putting a lot of pressure on companies to operate in the latter mode. That doesn't make it better -- certainly not for the longer-term investors -- just more fashionable. And fashion often means getting stuck with something impractical because everyone else is doing it. On this, I second Scrooge: Humbug!", 'Dividends indicate that a business is making more profit than it can effectively invest into expansion or needs to regulate cash-flow. This generally indicates that the business is well established and has stabilized in a dominant market position. This can be contrasted against businesses that: Dividends are also given preferential tax treatment. Specifically, if I buy a stock and sell it 30 days later, I will be taxed on the capital gains at the regular income rate (typically 25-33%), but the dividends would be taxed at the lower long-term capital gains rate (typically 15%).', "There are strategies based on yields. Dogs of the Dow being a specific example while Miller Howard has a few studies around dividends that may be of use if you additional material. Selling off a portion of the holding can run into problems as how could one hold 10 shares, selling a non-zero whole number every year for over 20 years if the stock doesn't ever pay a dividend in additional shares or cash?", '"Someone who buys a stock is fundamentally buying a share of all future dividends, plus the future liquidation value of the company in the event that it is liquidated. While some investors may buy stocks in the hope that they will be able to find other people willing to pay more for the stock than they did, that\'s a zero sum game. The only way investors can make money in the aggregate is if either stocks pay dividends or if the money paid for company assets at liquidation exceeds total net price for which the company sold shares. One advantage of dividends from a market-rationality perspective is that dividend payments are easy to evaluate than company value. Ideally, the share price of a company should match the present per-share cash value of all future dividends and liquidation, but it\'s generally impossible to know in advance what that value will be. Stock prices may sometimes rise because of factors which increase the expected per-share cash value of future dividends and liquidations. In a sane market, rising prices on an item will reduce people\'s eagerness to buy and increase people\'s eagerness to sell. Unfortunately, in a marketplace where steady price appreciation is expected the feedback mechanisms responsible for stability get reversed. Rapidly rising prices act as a red flag to buyers--unfortunately, bulls don\'t see red flags as signal to stop, but rather as a signal to charge ahead. For a variety of reasons including the disparate treatment of dividends and capital gains, it\'s often not practical for a company to try to stabilize stock prices through dividends and stock sales. Nonetheless, dividends are in a sense far more ""real"" than stock price appreciation, since paying dividends generally requires that companies actually have sources of revenues and profits. By contrast, it\'s possible for stock prices to go through the roof for companies which have relatively few assets of value and no real expectation of becoming profitable businesses, simply because investors see rising stock prices as a ""buy"" signal independent of any real worth."', 'Mostly we invest in companies to make money. The money can be paid to as in the form of dividends that are a share of the profit. Or the company can convince enough people that it will make a lot higher profit next year, so its stock prices increases. Clearly a company that reinvests its 20% profit from one shop to open an 2nd shop is doing well and is a good investment. But, But, But... we only have the companies word for it! A dividend paying company finds it a lot harder to hide bad news for long, as it will not have the money in the bank to pay the dividends.', "The upvoted answers fail to note that dividends are the only benefit that investors collectively receive from the companies they invest in. If you purchase a share for $100, and then later sell it for $150, you should note that there is always someone that purchases the same share for $150. So, you get $150 immediately, but somebody else has to pay $150 immediately. So, investors collectively did not receive any money from the transaction. (Yes, share repurchase can be used instead of dividends, but it can be considered really another form of paying dividends.) The fair value of a stock is the discounted value of all future dividends the stock pays. It is so simple! This shows why dividends are important. Somebody might argue that many successful companies like Berkshire Hathaway do not pay dividend. Yes, it is true that they don't pay dividend now but they will eventually have to start paying dividend. If they reinvest potential dividends continuously, they will run out of things to invest in after several hundred years has passed. So, even in this case the value of the stock is still the discounted value of all future dividends. The only difference is that the dividends are not paid now; the companies will start to pay the dividends later when they run out of things to invest in. It is true that in theory a stock could pay an unsustainable amount of dividend that requires financing it with debt. This is obviously not a good solution. If you see a company that pays dividend while at the same time obtaining more cash from taking more debt or from share issues, think twice whether you want to invest in such a company. What you need to do to valuate companies fairly is to estimate the amount of dividend that can sustain the expected growth rate. It is typically about 60% of the earnings, because a part of the earnings needs to be invested in future growth, but the exact figure may vary depending on the company. Furthermore, to valuate a company, you need the expected growth rate of dividends and the discount rate. You simply discount all future dividends, correcting them up by the expected dividend growth rate and correcting them down by the discount rate.", '"Dividends are one way to discriminate between companies to invest in. In the best of all worlds, your investment criteria is simple: ""invest in whatever makes me the most money on the timeline I want to have it."" If you just follow that one golden rule, your future financial needs will be taken care of! Oh... you\'re not 100% proof positive certain which investment is best for you? Good. You\'re mortal. None of us magically know the best investment for us. We wing it, based on what information we can glean. For instance, we know that bonds tend to be ""safer"" than stocks, but with a lower return, so if something calls itself a bond, we treat it differently than we treat a stock. So what sorts of information do we have? Well, think of the stock market linguistically. A dividend is one way for a company to communicate with their stockholders in the best way possible: their pocketbooks. There\'s some generally agreed upon behaviors dividends have (such as they don\'t go down without some good reason for it, like a global recession or a plan to acquire another company that is well-accepted by the stockholders). If a company starts to talk in this language, people expect them to behave a certain way. If they don\'t, the stock gets blacklisted fast. A dividend itself isn\'t a big deal, but a dividend which isn\'t shunned by a lot of smart investors... that can be a big deal. A dividend is a ""promise"" (which can be broken, of course) to cash out some of the company\'s profits to its shareholders. Its probably one of the older tools out there (""you give investors a share of the profits"" is pretty tried and true). It worked for many types of companies. If you see a dividend, especially one which has been reliable for many years, you can presume something about the type of company they are. Other companies find dividend is a poor tool to accomplish their goals. That doesn\'t mean they\'re better or worse, simply different. They\'re approaching the problem differently. Is that kind of different the kind you want in your books? Maybe. Companies which aren\'t choosing to commit a portion of their profits to shareholders are typically playing a more aggressive game. Are you comfortable that you can keep up with how they\'re using your money and make sure its in your interests? It can be harder in these companies where you simply hold a piece of paper and never get anything from them again."', "Why do people talk about stock that pay high dividends? Traditionally people who buy dividend stocks are looking for income from their investments. Most dividend stock companies pay out dividends every quarter ( every 90 days). If set up properly an investor can receive a dividend check every month, every week or as often as they have enough money to stagger the ex-dates. There is a difference in high $$ amount of the dividend and the yield. A $1/share dividend payout may sound good up front, but... how much is that stock costing you? If the stock cost you $100/share, then you are getting 1% yield. If the stock cost you $10/share, you are getting 10% yield. There are a lot of factors that come into play when investing in dividend stocks for cash flow. Keep in mind why are you investing in the first place. Growth or cash flow. Arrange your investing around your major investment goals. Don't chase big dollar dividend checks, do your research and follow a proven investment plan to reach your goals safely."]

Impact of EIN on taxation

['"Is it possible if (After getting EIN) I change my LLC type (disregarded entity or C type or S type or corporation or change in number of members) for tax saving ? You marked your question as ""real-estate"", so I\'m guessing you\'re holding rental properties in your LLC. That means that you will not be able to qualify for S-Corp, only C-Corp treatment. That in turn means that you\'ll be subject to double taxation and corporate tax rate. I fail to see what tax savings you\'re expecting in this situation. But yes, you can do it, if you so wish. I suggest you talk to a licensed tax adviser (EA/CPA licensed in your State) before you make any changes, because it will be nearly impossible to reverse the check-the-box election once made (for at least 5 years)."', "Your question mixes up different things. Your LLC business type is determined by how you organize your business at the state level. Separately, you can also elect to be treated in one of several different status for federal taxation. (Often this automatically changes your tax status at the state level too, but you need to check that with your state tax authority.) It is true that once you have an EIN, you can apply to be taxed as a C Corp or S Corp. Whether or not that will result in tax savings will depend on the details of your business. We won't be able to answer that for you. You should get a professional advisor if you need help making that determination."]

Fringe Benefits (Lodging) for single member S-Corp

['"If you use ""a room or other separately identifiable space"" within your apartment exclusively for your business, then you might be able to recoup a fraction of your rent for that. Check the rules for home office at the IRS and adopt a consistent and well-documented approach. (I would pay your full rent out of your personal account, and then do an ""expense report"" for the portion that\'s legitimately business related, but that\'s not a unique approach.) Other than that, I agree with the answer by litteadv - You cannot reduce your tax by the full amount of your rent just by having the S Corp pay, and trying to do so is probably playing with fire. Generally speaking, don\'t comingle business and personal expenses like that."', 'None whatsoever, no. Moreover, trying something like that would very likely trigger a full audit.']

Can I write off time I spent working on my business?

["To expand a little on what littleadv said, you can only deduct what something cost you. Even if you had done volunteer work for a charity as a sole prop you could only deduct your actual costs. If you paid an employee to do charity work or to learn something related to the business that would be deductible as a normal business expense. Some common sense would show that if you could deduct something that didn't cost you anything (your time) you could deduct away all of your income and avoid paying taxes altogether. Back to your more nuanced question could 2 businesses you own bill each other for services? Yes, but you will still have to pay taxes for money earned under each of them. You will also need to be careful that the IRS does not construe the transactions as being done solely to lower your tax bill.", "No, you cannot write off time, period. You should price the time spent into your product. I, occasionally, work on side projects of my own and forgo the possibility of earning direct income for that time. Income not earned is income not taxed, so there's nothing to deduct."]